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 according to the Avenue view.
Gross sales declined primarily as a result of the Workplace Depot Division operated 60 fewer retail areas than a yr in the past and skilled lowered in-store and on-line client site visitors.
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Moreover, the ODP Enterprise Options Division posted decrease gross sales regardless of exhibiting enhancing year-over-year comparable income tendencies.
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 tendencies, pushed by stronger gross sales traction with new clients and early contributions from our growth into the hospitality sector,” stated CEO Gerry Smith.
“Gross sales tendencies improved month over month all through the quarter, enhancing our place as we head into the second half of the yr,” Smith added.
The corporate said that, with its robust give attention to money, it anticipated to generate considerably increased adjusted free money circulation than the prior yr, additional strengthening its basis and stability sheet.
As of June 28, the agency had complete out there liquidity of $658 million.
This included $177 million in money and money equivalents and $481 million of obtainable credit score underneath the Fourth Amended Credit score Settlement. Complete debt stood at $245 million.
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Progress-Centered Restructuring
Within the second quarter, the corporate superior its “Optimize for Progress” plan to chop fixed-cost infrastructure and develop 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 take a position $185-230 million to realize roughly $380 million in EBITDA enchancment and create over $1.3 billion in complete worth.
“Whereas we’re not immune from modifications within the evolving tariff panorama, we imagine that we’re effectively positioned to regulate as essential to restrict potential impacts to our enterprise,” the corporate stated.
Outlook
The corporate anticipates continued enchancment within the second half of 2025, pushed by top-line features in ODP Enterprise Options and strong Workplace Depot outcomes, to generate over $115 million in adjusted free money circulation for the yr.
Worth Motion: ODP shares are buying and selling increased by 0.17% to $17.58 ultimately test Tuesday.
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