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OfficeMax to fall short
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September 30, 1999: 10:06 a.m. ET
No.3 office supply chain cites inventory, hurricane for results weakness
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NEW YORK (CNNfn) - OfficeMax Inc. said Thursday that inventory problems, increased spending for Internet expansion and the effects of Hurricane Floyd will cause it to miss Wall Street's profit forecasts in the third and fourth quarters by 38 cents to 42 cents a share.
The nation's No. 3 office supply chain said it will take a $50 million charge to liquidate some inventory.
Analysts polled by First Call Corp. had expected the company to report earnings of 31 cents in the third quarter and 41 cents per share in the fourth quarter.
Cleveland-based OfficeMax (OMX) said Hurricane Floyd, which hit the East Coast earlier this month, will hurt third-quarter results because of store closings and curtailed sales in 11 states. The storm hit during one of the company's major promotions for the quarter.
The company expects additional expenses from a chain-wide rollout of integrating Internet capabilities into all of its retail locations. The plan will allow customers access to OfficeMax.com and to purchase non-store inventory items.
OfficeMax also told of increased Internet expenses for marketing and technology.
OfficeMax, which is third in office supply retailing behind Office Depot (ODP) and Staples (SPLS), said it plans to reduce the number of superstore openings next year to between 50 and 75 from this year's figure of 115. The majority of new locations will be in markets where the company already has a dominant presence or is the second largest office products superstore operator.
OfficeMax has about 900 stores in 49 states and Puerto Rico. The chain is also expanding in Mexico, Japan and Brazil.
Shares of OfficeMax fell 1 to 6-1/16 in early Thursday trading. 
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OfficeMax
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