Sales Down but Income Up at OfficeMax

Itasca, IL-based cataloger/retailer OfficeMax had a mixed bag of financial news for the second quarter ended July 1. The good news was the company reported net income of $27.4 million after it recorded a net loss of $21.5 million for the second quarter of last year. But year-over-year sales fell 2%, to $2.04 billion from $2.09 billion.

Contract sales increased slightly, while operating income for the division nearly doubled, to $44.4 million from $23.7 million in the second quarter last year. Retail sales decreased 6%, due primarily to 109 store closings completed in the first quarter of 2006.

CEO Sam Duncan said in a statement: “We are pleased with our second-quarter operating performance and the resulting increase in our financial outlook for full year 2006. In our contract segment, through a continued focus on profitable sales and cost efficiencies, we achieved significant operating income growth. In our retail segment, significantly lower inventory clearance activity, reduced shrinkage, and cost controls provided strong operating income improvement.”