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OfficeMax Q3 Sales Rise 2%

11/13/2003 09:39:00 AM Eastern

Cleveland - OfficeMax posted fiscal third quarter same-store sales gains in each of its major merchandise categories — technology, furniture and supplies — and reported consolidated sales increased 2 percent for the quarter ended Oct. 25.

Sales hit $1.29 billion, up from $1.26 billion in the year-ago period. Consolidated same-store sales increased 3 percent, while domestic same-store sales also rose 3 percent in the three months, on top of a strong 8 percent increase for the same period in 2002.

OfficeMax said its same-store results for the three months reflect a ratcheting down of its originally planned promotional activities during the last month of the quarter. 'We are particularly pleased this sales gain was accomplished while enhancing gross margins, moderating our marketing efforts and at the same time reducing inventory levels by $42 million on a year-over-year basis,' said chairman/CEO Michael Feuer.

The positive same-store sales increase was realized despite temporary sales disruptions due to 38 store remodels completed during the third quarter, as well as negative impacts from the August blackout, which affected 124 stores in the Northeast and Midwest, and hurricane Isabel, which affected business at 35 stores.

OfficeMax recorded a 46 percent increase in net income for the third quarter, hitting $24.1 million, compared with $16.5 million in the same period a year earlier.

Domestic store sales, by far the bulk of the business, reached $1.24 billion in the third quarter, compared with $1.21 billion year on year. Net income for domestic stores reached $22.9 million in the third quarter, up from $15.4 million the prior year.

For the nine months, OfficeMax domestic same-store sales rose 4 percent, sales of $3.5 billion, compared with $3.3 billion a year earlier. Net income for domestic stores in the nine months was $5.1 million, down from $44.8 million year on year.

Consolidated sales for the nine months climbed 3 percent, reaching $3.6 billion, up from $3.4 billion in the same period a year ago. Consolidated net income dropped to $7.1 million, compared with $46.7 million year over year.

OfficeMax said it would hold a special shareholders’ meeting Dec. 9 to vote on its announced merger with Boise Cascade. If shareholders of both companies approve the deal, the transaction is expected to close in early December.