Naperville, Ill. - Slower sales and weaker gross margin cut OfficeMax's first quarter profits by more than half.
Net income was $11.4 million on net sales of $1.9 billion, a 2.8 percent decrease, for the three months ended March 26.
In a statement, CFO Bruce Besanko attributed the sales declines to weaker store traffic and lower spending by corporate customers.
Retail sales declined 1.8 percent to $937.3 million, same-store sales slipped 1.2 percent, and retail income fell 34 percent to $25.6 million, or 2.7 percent of sales.
Retail gross profit margin fell to 28.7 percent from 30.1 percent during the year-ago quarter due to increased promotional activity, an unfavorable sales mix within CE, and deleveraging of fixed expenses, the company said.
Last week the company named former Walmart executive Michael Lewis to run its retail operations as executive VP and retail president, effective May 2.
Recently appointed president/CEO Ravi Saligram promised "significant" cost-cutting to bring expenses in line with last year. "We believe these actions should help drive improved performance," he said.