Download PDF

1. Company Snapshot

1.a. Company Description

The ODP Corporation provides business services and supplies, products, and digital workplace technology solutions for small, medium, and enterprise businesses.The company operates in two divisions, Business Solutions and Retail.The Business Solutions division offers office supply products and services, cleaning and breakroom supplies, technology services, copy and print services, and office furniture products and services through sales forces, catalogs, and telesales, as well as through Internet Websites in the United States, Puerto Rico, the U.S. Virgin Islands, and Canada.


The Retail division operates a chain of retail stores, which offer office supplies; technology products and solutions; business machines and related supplies; print, cleaning, breakroom, and facilities products; and furniture, as well as printing, copying, mailing, and shipping services.As of December 31, 2021, this division operated 1,038 retail stores in the United States, Puerto Rico, and the U.S. Virgin Islands.The company offers its products under various brands, including Office Depot, OfficeMax, and Grand&Toy, as well as others.


The ODP Corporation was incorporated in 1986 and is headquartered in Boca Raton, Florida.

Show Full description

1.b. Last Insights on ODP

Here is a 90-word analysis of the negative drivers behind the recent stock performance of The ODP Corporation: ODP Corp's recent struggles can be attributed to concerns over its declining sales and profitability. The office supplies retailer has been facing intense competition from online retailers, leading to a decline in its brick-and-mortar sales. Additionally, the company's efforts to transform its business model and invest in e-commerce capabilities have been slow to bear fruit, weighing on investor sentiment. Furthermore, ODP Corp's high debt levels and lack of share buyback programs have added to the negative sentiment.

1.c. Company Highlights

2. The ODP Corporation's Q2 2025 Earnings Analysis

The ODP Corporation reported adjusted EBITDA of $47 million and generated $13 million in free cash flow, exceeding expectations. Revenue was $1.6 billion, down 8% year-over-year, primarily due to 60 fewer stores in operation, reduced consumer traffic, and lower enterprise sales. Adjusted operating income for the second quarter was $25 million, and adjusted EPS came out at $0.51, beating estimates of $0.33. The company's sales to hospitality customers rose by a low double-digit percentage, driven by its expanded offering, including OS&E products.

Publication Date: Aug -19

📋 Highlights
  • Adjusted Financials Beat Expectations: Generated $47 million in adjusted EBITDA and $13 million in free cash flow, surpassing forecasts despite 8% YoY revenue decline to $1.6 billion.
  • Retail Segment Recovery: Office Depot achieved 200 bps sequential and YoY improvement in comparable store sales, driving stronger top-line growth.
  • Strategic Hospitality Expansion: Partnered with a major hotel management company covering 15,000 members, boosting hospitality sales by low double digits and securing $500M+ in new customer contracts.
  • Restructuring Progress: Closed 24 retail stores and 3 distribution facilities under "Optimize for Growth," aiming to improve margins and streamline operations.
  • Full-Year Free Cash Flow Outlook: Expects adjusted free cash flow to exceed $150 million in 2025, up from $115 million guidance, driven by B2B growth and retail strength.

Segment Performance

The Retail segment, Office Depot, delivered strong results, driving improved top-line trends both year-over-year and sequentially. Comparable store sales trends improved by 200 basis points versus last year. The B2B distribution segment also saw improved comparable revenue trends, up approximately 200 basis points both sequentially and year-over-year. Veyer, the company's distribution business, delivered third-party revenue of $19 million, up 90% over last year, and third-party EBITDA of $5 million, a 32% increase compared to the prior year period.

Growth Initiatives and Restructuring

The company is making progress in its entry into the hospitality industry, with a major strategic partnership with one of the world's largest hotel management organizations. The partnership covers approximately 15,000 members with hotels and related assets. The company closed about 2 dozen retail stores and 3 distribution facilities in Q2 as part of its Optimize for Growth restructuring plan. The plan aims to streamline fixed cost infrastructure and improve margin profile while accelerating growth in B2B market segments.

Outlook and Valuation

The company expects to maintain momentum in the second half of the year, driven by additional top-line improvement in its B2B distribution business and sustained strength in its retail channel. Adjusted free cash flow is expected to exceed $150 million for the year. With a P/E Ratio of 24.23 and a Free Cash Flow Yield of 15.04%, the company's valuation metrics suggest that there is still room for growth. According to CEO Gerry Smith, "The company's results demonstrate meaningful progress, with year-over-year trends improving in its B2B business and consumer segment."

Financial Performance and Guidance

The company's financial performance is expected to improve in the second half of the year, with a focus on converting new customers, strengthening relationships with existing clients, and driving growth in hospitality. The company assumes a relatively stable macroeconomic environment and minimal additional impact from the evolving tariff environment in its outlook. With a net debt to EBITDA ratio of 3.73, the company has a manageable debt burden, and its ROIC of 3.55% suggests that it is generating returns above its cost of capital.

3. NewsRoom

Card image cap

American Century Companies Inc. Purchases 18,842 Shares of The ODP Corporation $ODP

Dec -03

Source: defenseworld.net

Card image cap

Critical Contrast: ODP (NASDAQ:ODP) and Tractor Supply (NASDAQ:TSCO)

Nov -21

Source: defenseworld.net

Card image cap

Office Depot Unveils Exciting New Brands and Holiday Savings for 2025

Nov -10

Source: businesswire.com

Card image cap

$HAREHOLDER ALERT: The M&A Class Action Firm Continues To Investigate Merger--AL, HNI, SCS, and ODP

Nov -05

Source: prnewswire.com

Card image cap

ODP Corp. (ODP) Surpasses Q3 Earnings Estimates

Nov -05

Source: zacks.com

Card image cap

The ODP Corporation Announces Third Quarter 2025 Results

Nov -05

Source: businesswire.com

Card image cap

SHAREHOLDER RIGHTS ALERT: Halper Sadeh LLC Investigates ODP and AL on Behalf of Shareholders

Oct -04

Source: globenewswire.com

Card image cap

$HAREHOLDER ALERT: The M&A Class Action Firm Announces An Investigation of ODP Corporation (NASDAQ: ODP)

Sep -30

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.72%)

6. Segments

Business Solutions

Expected Growth: 4.65%

The 4.65% growth of Business Solutions from The ODP Corporation is driven by increasing demand for digital transformation, cloud-based services, and cybersecurity solutions. Additionally, the company's focus on e-commerce, data analytics, and supply chain optimization has contributed to its growth. Furthermore, strategic partnerships and acquisitions have expanded its customer base and enhanced its product offerings.

Office Depot

Expected Growth: 4.77%

Office Depot's 4.77% growth is driven by increasing demand for hybrid work solutions, expansion of its business-to-business platform, and strategic partnerships. Additionally, the company's focus on digital transformation, cost savings initiatives, and effective inventory management have contributed to its growth momentum.

Veyer

Expected Growth: 4.83%

Veyer from The ODP Corporation's 4.83% growth is driven by increasing demand for office supplies, expansion into e-commerce, and strategic partnerships. Additionally, the company's focus on digital transformation, cost savings initiatives, and investments in emerging technologies have contributed to its growth momentum.

Varis

Expected Growth: 10.27%

Varis from The ODP Corporation's 10.27% growth is driven by increasing demand for office supplies, expansion into new markets, and strategic partnerships. Additionally, the company's focus on digital transformation, cost savings initiatives, and effective inventory management have contributed to its growth momentum.

7. Detailed Products

Office Depot

Office supplies and services for businesses and consumers

CompuCom

IT services and technology products for businesses

Grand & Toy

Office supplies and services for businesses and consumers in Canada

Guilbert

Office supplies and services for businesses and consumers in Mexico

ODP Business Solutions

Business-to-business office supplies and services

Varis

Facilities management and maintenance services

8. The ODP Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for The ODP Corporation is moderate due to the presence of alternative office supplies and services. However, the company's strong brand recognition and customer loyalty mitigate this threat to some extent.

Bargaining Power Of Customers

The bargaining power of customers is relatively low for The ODP Corporation, as the company operates in a highly competitive market with many players. This limits the ability of customers to negotiate prices or demand customized products.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate for The ODP Corporation, as the company relies on a few large suppliers for its products. However, the company's scale and negotiating power help to mitigate this threat.

Threat Of New Entrants

The threat of new entrants is relatively low for The ODP Corporation, as the office supplies market is highly competitive and requires significant capital investment to enter. Additionally, the company's strong brand recognition and customer loyalty create barriers to entry.

Intensity Of Rivalry

The intensity of rivalry is high in the office supplies market, with many players competing for market share. The ODP Corporation faces intense competition from online retailers, big-box stores, and specialty office supply stores.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 27.90%
Debt Cost 3.95%
Equity Weight 72.10%
Equity Cost 12.40%
WACC 10.04%
Leverage 38.69%

11. Quality Control: The ODP Corporation passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Honest

A-Score: 4.0/10

Value: 4.7

Growth: 6.0

Quality: 6.4

Yield: 0.0

Momentum: 4.5

Volatility: 2.7

1-Year Total Return ->

View Full Report
Stock-Card
1stdibs

A-Score: 3.9/10

Value: 8.4

Growth: 4.7

Quality: 5.2

Yield: 0.0

Momentum: 1.0

Volatility: 4.0

1-Year Total Return ->

View Full Report
Stock-Card
Big 5 Sporting Goods

A-Score: 3.7/10

Value: 9.8

Growth: 0.6

Quality: 3.6

Yield: 5.0

Momentum: 1.5

Volatility: 2.0

1-Year Total Return ->

View Full Report
Stock-Card
Revolve

A-Score: 3.4/10

Value: 2.7

Growth: 5.3

Quality: 6.6

Yield: 0.0

Momentum: 2.5

Volatility: 3.0

1-Year Total Return ->

View Full Report
Stock-Card
Office Depot

A-Score: 3.3/10

Value: 6.6

Growth: 3.8

Quality: 2.9

Yield: 0.0

Momentum: 4.0

Volatility: 2.3

1-Year Total Return ->

View Full Report
Stock-Card
1800Flowers

A-Score: 2.6/10

Value: 9.4

Growth: 1.0

Quality: 2.7

Yield: 0.0

Momentum: 0.5

Volatility: 2.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

27.97$

Current Price

27.97$

Potential

-0.00%

Expected Cash-Flows