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Bad News for Office Suppliers

OfficeMax and Office Depot continue to struggle as sales of big-ticket items remain weak.

(Updated with stock prices.)



) -- Office-supply retailers

Office Depot

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continue to struggle as businesses and consumers cut back on big-ticket purchases.

Office Depot reported a wider third-quarter loss than a year ago and missed sales expectations.

During the quarter, the company lost $413 million, or $1.51 a share, compared with red ink of $7 million, or 2 cents a share, in the year-ago period. Excluding items, the company had an adjusted loss of 8 cents a share, beating analysts' expectations of a 10-cent loss.

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But sales fell 17% to $3.03 billion, missing Wall Street's consensus target of $3.07 billion.

OfficeMax, meanwhile, swung to a profit in its third quarter, but forecast a loss for the fourth quarter.

The company earned $5.7 million, or 7 cents a share, compared with a loss of $432.7 million, or $5.70 a share, last year. Excluding one-time items, the company posted adjusted earnings of 8 cents a share, below Wall Street's target of 14 cents a share.

Sales tumbled about 13% to $1.83 billion.

The reasons behind the poor showings are clear: As job losses continue to mount, few businesses are willing to invest in new office supplies like fax machines, photo copiers and printers.

Nonethless, both retailers are reeling off GDP growth, as Office Depot soars 8.8% to $6.43 and Office Max is growing 6.3% to $10.88 in afternoon trading.

-Reported by Jeanine Poggi in New York.

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