Great News Foe Office Max . Rally should begin Monday.
NEW YORK (AP) -- Moody's Investors Service on Friday changed its outlook on OfficeMax Inc. to "stable" from "negative" and affirmed the retailer's "B1" corporate family and probability of default ratings, and said the company's "worst days are behind it."
"B1" is considered a non-investment grade, or "junk" level rating.
The ratings agency said the change in outlook to stable reflects its belief that the Naperville, Ill.-based chain's operating performance is likely to improve under management's new strategic plan.
The short-term positive impact on the company's credit metrics, however, is likely to be modest, it said.
Moody's Senior Analyst Charlie O'Shea said the outlook change reflects the firm's belief that, absent a double-dip recession, OfficeMax will be likely be able to solidify its B1 positioning.
The agency said OfficeMax ratings could be upgraded if its operating performance improves significantly. If the company is unable to continue to improve its credit profit, it could see a downgrade.
OfficeMax is the third-largest office supplies retailer in the country
OMX will never realize its full potential as long as they keep the top-heavy managment structure in place there today. It is frustrating that the new CEO does not see or understand this. There are way too many over paid executives that at best add absolutely nothing to the bottom line and and at worse, suppress sales by continually adding administrative bureaucracy to every step of every process. Product costs are inflated to cover the executive compensation and all the cuts and sacrifices are to front-line sales who are already spread way too thin. It's a model for failure, but as long as those executives are pulling their six or seven figure pay checks, who cares? So until the board wakes up and appoints a CEO who is smart enough to realize this is the problem and fixes it, this stock will continue to flounder below 7.