The ODP Company ODP reported second-quarter outcomes on Tuesday with adjusted earnings per share of 51 cents, beating the analyst consensus estimate of 36 cents.
Quarterly gross sales of $1.59 billion (down 8% yr over yr) was in keeping with the Avenue view.
Gross sales declined primarily as a result of the Workplace Depot Division operated 60 fewer retail places than a yr in the past and skilled lowered in-store and on-line shopper site visitors.
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Moreover, the ODP Enterprise Options Division posted decrease gross sales regardless of exhibiting bettering year-over-year comparable income traits.
Adjusted working revenue fell to $25 million within the second quarter, down from $33 million within the year-ago interval. Adjusted EBITDA declined to $47 million versus $57 million yr over yr.
“In our B2B distribution enterprise, we achieved roughly a 200-basis level enchancment in year-over-year income traits, pushed by stronger gross sales traction with new clients and early contributions from our enlargement into the hospitality sector,” mentioned CEO Gerry Smith.
“Gross sales traits improved month over month all through the quarter, bettering our place as we head into the second half of the yr,” Smith added.
The corporate said that, with its sturdy give attention to money, it anticipated to generate considerably increased adjusted free money move than the prior yr, additional strengthening its basis and stability sheet.
As of June 28, the agency had whole out there liquidity of $658 million.
This included $177 million in money and money equivalents and $481 million of obtainable credit score below the Fourth Amended Credit score Settlement. Complete debt stood at $245 million.
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Development-Centered Restructuring
Within the second quarter, the corporate superior its “Optimize for Development” plan to chop fixed-cost infrastructure and increase B2B choices into hospitality, healthcare and different verticals.
It acknowledged $12 million of restructuring bills, primarily severance and the closure of 23 retail shops, three distribution services and one satellite tv for pc location.
Over the plan’s multi-year horizon, the corporate expects to speculate $185-230 million to attain roughly $380 million in EBITDA enchancment and create over $1.3 billion in whole worth.
“Whereas we aren’t immune from adjustments within the evolving tariff panorama, we imagine that we’re nicely positioned to regulate as essential to restrict potential impacts to our enterprise,” the corporate mentioned.
Outlook
The corporate anticipates continued enchancment within the second half of 2025, pushed by top-line positive aspects in ODP Enterprise Options and strong Workplace Depot outcomes, to generate over $115 million in adjusted free money move for the yr.
Worth Motion: ODP shares are buying and selling increased by 0.17% to $17.58 eventually test Tuesday.
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Picture by Hrach Hovhannisyan by way of Shutterstock
