Office suppliers up as cost cuts boost bottom line
NEW YORK (AP) — Shares of office supply stores rose on Tuesday after Office Depot and OfficeMax both reported third-quarter results that bested expectations, helped by cost cuts.
Office supply retailers have suffered since the recession as people and businesses alike cut down on buying office supplies. Companies have cut costs and expanded into other areas like breakroom supplies, and those efforts appear to be paying off.
OfficeMax Inc., based in Naperville, Ill., said third-quarter net income rose on tighter cost controls. Adjusted income beat Wall Street estimates by a penny. The cost of goods and lease costs both declined. That helped offset a 1.7 percent decline in revenue.
Shares rose 96 cents, or 12.8 percent, to $8.40 in afternoon trading. The stock is up 85 percent since the beginning of the year.
Meanwhile, Office Depot Inc., based in Boca Raton, Fla., reported a loss for the third-quarter. Adjusted for restructuring and impairment costs, results beat expectations. Cost of goods sold and occupancy costs decreased during the quarter.
Shares of Office Depot Inc. rose 44 cents, or 17.5 percent, to $2.95 in afternoon trading. The stock is up about 37 percent since the beginning of the year.
Staples, the largest office supply retailer in the U.S., reports its third-quarter results Nov. 14. Its shares rose 17 cents to $11.74 Tuesday afternoon.