OfficeMax Inc. reported a better-than-expected quarterly profit as the third-largest U.S. office supply chain kept a tight lid on costs to offset lackluster sales.
Many investors look at office-supply retailers as a barometer of economic health because demand for their products is closely tied to white-collar employment rates.
OfficeMax’s net income fell to $4.9 million, or 6 cents a share, in the first quarter, from $11.4 million, or 13 cents a share, a year earlier.
Excluding charges related to store closures, the company earned 23 cents a share. On that basis, analysts on average were looking for 16 cents a share, according to Thomson Reuters I/B/E/S.
Sales rose 0.5 percent to $1.87 billion, in line with Wall Street estimates.
The news came a week after larger rival Office Depot Inc met Wall Street profit estimates with the help of cost cuts. Industry leader Staples Inc is due to report its results next week.
Sales at all three chains have suffered as both corporate customers and other shoppers cut back on discretionary spending, forcing the retailers to rely on cost cuts to boost profits.
OfficeMax said sales for the second quarter will be flat to slightly lower compared with a year earlier. It also expects adjusted operating income margin to be about in line with the 1.1 percent of a year earlier.
