Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: After reporting first-quarter earnings, OfficeMax
So what: It's hard to overstate the damage here, folks. While OfficeMax avoided losing money, as we saw at Office Depot
Now what: Management blamed the usual factors -- discounts, an unfavorable "product mix," and of course, "bad weather." But wherever you place the blame, the results were shockingly bad. OfficeMax fell more than 50% short of its earnings target for the quarter, and management gave precious little hope for better results in the current quarter. Revenue is only expected to be "flat" against last year's Q2, but if a 2.8% slip in revenue decimated Q1 profit, I can't imagine how merely flat revenue will salvage Q2. Even a 15-times-earnings valuation may not be cheap enough for this stock.
Will OfficeMax prove skeptics wrong and deliver a blockbuster quarter? Or will it become the next Blockbuster? Add it to your Watchlist and find out.