NEW YORK – Varied retailers, including OfficeMax, Target and Home Depot, provided a mixed view about retail conditions during the fourth quarter of 2011.

OfficeMax reported that one-time charges contributed to a 76 percent decline in fourth-quarter profits.

The No. 3 office-supply chain said net income for the three months, ended Dec. 31, was $2.9 million on a 3.9 percent gain in net sales, to $1.8 billion.

Results reflect one additional week of operation in the U.S., plus $17.8 million in pretax charges for severance pay and impairment of certain U.S. stores.

The chain closed 22 U.S. locations last year.

Within its retail segment, comprised of 896 U.S. and 82 Mexican stores, sales rose 5.7 percent to $901 million and comp-store sales edged up 0.2 percent, reflecting a slight decline in U.S. comps.

Inventory markdowns, higher fuel costs and increased promotional activity to drive holiday traffic led to a 3.2 percent decline in gross profit margin, to 26.9 percent, and retail segment income fell 30 percent to $13.2 million, or 1.4 percent of sales, compared with 2.2 percent of sales during the year-ago quarter.

“Sales trends improved in the fourth quarter but remain soft,” noted Bruce Besanko, executive VP and chief financial and administrative officer. “Consequently we will continue to streamline our cost structure, enabling us to make strategic investments in initiatives that will jump-start growth.”

For the full year, profits fell 52 percent to $32.8 million, and net sales slipped 0.4 percent to $7.1

OfficeMax announced in November that it would begin tests of in-store mobile departments that are staffed and operated by RadioShack. A pilot program was scheduled to begin last month in about 15 to 20 stores within the San Francisco market.

Target reported slightly higher net sales but lower net earnings in its fiscal fourth quarter, ended Jan. 28.

The chain posted net earnings for the quarter of $981 million, down 5.2 percent from the prior year’s fourth quarter. Net sales for the quarter were up 3.3 percent to $20.9 billion.

For the fiscal year net earnings were $2.93 billion, down just 0.3 percent compared with the prior year. Net sales were $68.4 billion, up 4.1 percent.

“Target generated strong financial performance in 2011, overcoming sluggish economic growth, restrained consumer spending and an intensely promotional holiday season,” said Gregg Steinhafel, chairman, president and CEO of Target.

The Home Depot had higher net sales and net earnings in the fiscal fourth quarter, ended Jan. 29.

Sales for the quarter were $16 billion, a 5.9 percent increase from the fourth quarter of fiscal 2010. Compstore sales for the quarter were up 5.7 percent, and comp sales for U.S. stores were up 6.1 percent.

Net earnings for the fourth quarter were $774 million, compared with net earnings of $587 million in the same period of the prior year.

For the fiscal year sales were $70.4 billion, an increase of 3.5 percent from fiscal 2010. Total company comp-store sales for the year increased 3.4 percent, and comp sales for U.S. stores were positive 3 percent for the year.

Net earnings were $3.9 billion, up from the prior fiscal year’s $3.33 billion. – Additional reporting by Steve Smith
Release Date: 
2012-02-28 18:46:00
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Abstract Web: 
NEW YORK – Varied retailers, including OfficeMax, Target and Home Depot, provided a mixed view about retail conditions during the fourth quarter of 2011.
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