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ODP Corp (ODP)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered broad beats versus Wall Street consensus: revenue $1.699B vs ~$1.668B*, adjusted EPS $1.06 vs ~$0.65*, and adjusted EBITDA $76M vs ~$59M*, despite a GAAP operating loss driven by restructuring and impairment charges .
  • Sequentially better trends: adjusted EBITDA improved vs Q4, retail comps improved 500 bps year over year to -5%, and adjusted free cash flow rose to $45M from $17M last year .
  • Management emphasized B2B growth initiatives (CoreTrust GPO win, hospitality supplier agreements) and expects onboarding to drive stronger performance in 2H 2025; no detailed guidance due to tariff uncertainty, but directional outlook calls for higher adjusted FCF and improved leverage by year-end .
  • Veyer’s third-party revenue increased 89% year over year with continued customer adds, reinforcing supply chain-as-a-service momentum .

Values marked with * are from S&P Global consensus estimates.

What Went Well and What Went Wrong

What Went Well

  • New business momentum and hospitality expansion: Signed CoreTrust GPO agreement (3,500+ members) and supplier partnerships (Sobel Westex, Hunter Amenities), laying foundation for 2H contributions .
  • Retail comps and margins improved: Office Depot comparable store sales -5% vs -10% prior year; targeted promotions lifted average order volumes and sequential margin trends .
  • Cash generation strengthened: Adjusted free cash flow up to $45M (+165% YoY) on operational discipline and working capital management .
  • Quote: “We’re laying the foundation to serve the over 15,000 members within this buying group…on track to begin driving more meaningful results in the hospitality segment beginning in the second half of this year.” — CEO Gerry Smith .

What Went Wrong

  • Top-line declines persisted: Revenue down 9% YoY, driven by 46 fewer retail locations and softer B2B demand (macro caution, fewer customers, weather impacts) .
  • GAAP results pressured by non-core charges: $86M in restructuring and impairments drove GAAP operating loss (-$32M) and GAAP EPS (-$0.97) .
  • B2B onboarding slower than anticipated; large customer loss from mid-2024 still impacting comparisons, with better comp expected next quarter .
  • Severe weather estimated to account for ~80 bps of ODP Business Solutions sales decline .

Financial Results

Trend vs Prior Quarters

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Billions)$1.780 $1.624 $1.699
Adjusted EPS ($)$0.71 $0.66 $1.06
Adjusted EBITDA ($USD Millions)$62 $58 $76
Operating Margin % (GAAP)5.7% 1.2% -1.9%
Adjusted Operating Margin %2.3% 2.0% 3.2%

Q1 2025 vs Prior Year (Q1 2024)

MetricQ1 2024Q1 2025YoY Change
Revenue ($USD Billions)$1.869 $1.699 -9%
GAAP Diluted EPS – Continuing Ops ($)$0.83 $(0.97) n/m
Adjusted EPS – Continuing Ops ($)$1.31 $1.06 -19% per share
Adjusted EBITDA ($USD Millions)$91 $76 -$15M
Adjusted Free Cash Flow ($USD Millions)$17 $45 +$28M

Actuals vs Consensus Estimates

MetricQ3 2024 Estimate*Q3 2024 ActualQ4 2024 Estimate*Q4 2024 ActualQ1 2025 Estimate*Q1 2025 Actual
Revenue ($USD Billions)$1.820*$1.780 $1.608*$1.624 $1.668*$1.699
Primary EPS ($)$1.602*$0.71 $0.863*$0.66 $0.652*$1.06
EBITDA ($USD Millions)$112.0*$62 $61.1*$58 $58.8*$76

Values marked with * are from S&P Global.

Segment Breakdown – Trend

Segment MetricQ3 2024Q4 2024Q1 2025
ODP Business Solutions – External Sales ($USD Millions)$914 $825 $850
ODP Business Solutions – Operating Income ($USD Millions)$28 $25 $21
Office Depot – External Sales ($USD Millions)$852 $778 $832
Office Depot – Operating Income ($USD Millions)$23 $30 $45
Veyer – External Sales ($USD Millions)$14 $20 $17
Veyer – Operating Income ($USD Millions)$9 $(2) $8

KPIs and Balance Sheet

KPIQ3 2024Q4 2024Q1 2025
Comparable Store Sales (Office Depot)-10% -8% -5%
Total Retail Stores (U.S.)885 869 857
Veyer Third-Party Revenue ($USD Millions)$14 $20 $17
Veyer Third-Party EBITDA ($USD Millions)$3 $1 $3
Adjacency Mix (B2B %)44% 44% 44%
Operating Cash Flow ($USD Millions)$81 $34 $57
Adjusted Free Cash Flow ($USD Millions)$68 $(57) $45
CapEx ($USD Millions)$22 $25 $21
Total Available Liquidity ($USD Millions)$728 $644 $653
Cash and Equivalents ($USD Millions)$192 (incl. held for sale) $166 $185
Total Debt ($USD Millions)$246 $279 $262

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Detailed FY 2025 GuidanceFY 2025Not providedNot providing detailed guidance due to tariff uncertainty Maintained “no detailed guidance”
Adjusted Free Cash FlowFY 2025N/A“Significantly higher…compared to last year” Directional raised
Consumer Trends2025N/A“Continued improvement…over coming quarters” Directional positive
B2B Trajectory2H 2025N/A“Improving trends as we onboard new customers and gain traction in hospitality” Directional positive
Leverage RatioFY 2025 YEN/A“Further improvements…by year-end” Directional positive

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
Hospitality ExpansionAnnounced preferred provider agreement; entry to $16B market; building distribution relationships Supplier agreements with Sobel Westex and Hunter Amenities; inventory build; sales talent; expecting 2H contribution Accelerating
B2B New Contracts / OnboardingLarge multi-year contract; comping customer loss in coming quarters CoreTrust GPO win; onboarding pace improving; pipeline >$500M annual spend wins over past 3 quarters Improving second-half
Retail Merchandising & CompsWeaker macro; -8% comps in Q4 Daily management system, value-oriented merchandising; comps -5% YoY; April ~-4% and early May better (commentary) Improving
Tariffs / MacroMacro caution, severe weather impacted back-to-school No detailed guidance; proactive tariff mitigation (sourcing shift, pricing pass-through on MAP categories) Manageable with mitigation
Veyer 3rd-Party GrowthLaunched social-media e-commerce client; 30–150% YoY growth in external revenue Q3/Q4 +89% YoY external revenue; onboarding investments, EBITDA flat YoY Growing pipeline
Capital Allocation2024 buybacks, moderated pace ahead Focused on core B2B investments; board evaluates buybacks periodically Invest in core; opportunistic buybacks

Management Commentary

  • “We delivered solid operational results…EBITDA improving sequentially and free cash flow increasing meaningfully over last year. Our consumer division was a key contributor…” — CEO Gerry Smith .
  • “We’re making significant underlying progress on our efforts to serve the hospitality industry…laying the foundation to serve the over 15,000 members…on track to begin driving more meaningful results…in the second half of this year.” — CEO Gerry Smith .
  • “Adjusted free cash flow…$45M…a 165% increase…” — Co‑CFO Adam Haggard .
  • “We…have taken proactive measures to…mitigate potential [tariff] impacts…diversified our sourcing…shifting away from China…introducing strategic pricing initiatives…identifying alternative brands.” — Co‑CFO Adam Haggard .

Q&A Highlights

  • Retail momentum: Value-oriented merchandising and a daily management system “gamified” store performance; April comps improved to ~-4% and early May better, underpinning cash and margin focus .
  • Store closures pace: Optimize for Growth will “optimize cash and margin,” and comp improvement may “change trajectory” of closures; ongoing modeling to maximize future cash flow .
  • B2B onboarding: Delays vary by customer; hospitality inventory lead times longer; adopting daily discipline to accelerate onboarding; expecting 2H impact .
  • Tariff exposure: MAP categories enable pass-through pricing; direct imports diversified from China (Vietnam, Indonesia, Malaysia) and active “war room” monitoring; expect limited net impact .
  • Buybacks: Board and management “continually evaluate” repurchases, considering constraints; reaffirmed confidence in future .

Estimates Context

  • Q1 2025 beat across the board: Revenue $1.699B vs ~$1.668B*, adjusted EPS $1.06 vs ~$0.65*, adjusted EBITDA $76M vs ~$59M*; estimate counts were modest (3 for EPS/revenue) supporting potential upward revisions for 2H trajectory as onboarding ramps .
  • Q4 2024 was mixed (revenue slight beat, EPS/EBITDA misses), while Q3 2024 materially missed EPS/EBITDA, partly reflecting legal monetization distortions to comparability .
  • With stronger retail trends and hospitality/B2B wins, Street models may need to raise adjusted EBITDA and FCF for 2H 2025, while keeping caution on top-line given a smaller retail footprint and macro sensitivity .

Values marked with * are from S&P Global.

Key Takeaways for Investors

  • Broad Q1 beat versus consensus and sequential improvement in adjusted margins position ODP for estimate upward revisions into 2H 2025, especially on EBITDA and FCF .
  • Retail is a near-term catalyst: comps/margins improving with disciplined promotion and daily store management, supporting cash generation despite a smaller footprint .
  • B2B onboarding (CoreTrust, large enterprise wins) and hospitality supplier agreements should begin contributing in 2H; monitor cadence of ramp and inventory readiness as key drivers .
  • Veyer third‑party growth provides an incremental, higher‑quality revenue stream; track new logo adds and EBITDA capture as onboarding investments taper .
  • Tariff risk appears proactively mitigated via sourcing diversification and pricing mechanisms; watch policy developments but current measures should limit margin impact .
  • Capital allocation pivoting to core B2B investments; share repurchases remain opportunistic. Liquidity ($653M) and manageable debt ($262M) provide flexibility .
  • Near-term trading: Positive setup on improving comps and 2H growth narrative; Medium-term thesis hinges on successful B2B pivot and hospitality execution translating into sustained margin and FCF expansion .
Document citations:  
- Q1 2025 8-K and press release: **[800240_0000950170-25-064964_odp-ex99_1.htm:0]** **[800240_0000950170-25-064964_odp-ex99_1.htm:1]** **[800240_0000950170-25-064964_odp-ex99_1.htm:3]** **[800240_0000950170-25-064964_odp-ex99_1.htm:4]** **[800240_0000950170-25-064964_odp-ex99_1.htm:5]** **[800240_0000950170-25-064964_odp-ex99_1.htm:13]** **[800240_0000950170-25-064964_odp-ex99_1.htm:14]** **[800240_0000950170-25-064964_odp-ex99_1.htm:15]** **[800240_0000950170-25-064964_odp-ex99_1.htm:16]** **[800240_0000950170-25-064964_odp-ex99_1.htm:17]** **[800240_e92d3861f214443daf99a7cf159902ae_0]** **[800240_e92d3861f214443daf99a7cf159902ae_1]** **[800240_e92d3861f214443daf99a7cf159902ae_2]** **[800240_e92d3861f214443daf99a7cf159902ae_3]** **[800240_e92d3861f214443daf99a7cf159902ae_4]** **[800240_e92d3861f214443daf99a7cf159902ae_5]** **[800240_e92d3861f214443daf99a7cf159902ae_6]** **[800240_e92d3861f214443daf99a7cf159902ae_7]** **[800240_e92d3861f214443daf99a7cf159902ae_12]** **[800240_e92d3861f214443daf99a7cf159902ae_14]** **[800240_e92d3861f214443daf99a7cf159902ae_16]** **[800240_e92d3861f214443daf99a7cf159902ae_17]**  
- Q1 2025 earnings call: **[800240_ODP_3425963_1]** **[800240_ODP_3425963_2]** **[800240_ODP_3425963_3]** **[800240_ODP_3425963_4]** **[800240_ODP_3425963_5]** **[800240_ODP_3425963_8]** **[800240_ODP_3425963_9]** **[800240_ODP_3425963_10]** **[800240_ODP_3425963_11]** **[800240_ODP_3425963_12]** **[800240_ODP_3425963_13]** **[800240_ODP_3425963_14]** **[800240_ODP_3425963_15]** **[800240_ODP_3425963_16]** **[800240_ODP_3425963_17]**  
- Prior quarters: Q4 2024 8-K **[800240_0000950170-25-027325_odp-ex99_1.htm:0]** **[800240_0000950170-25-027325_odp-ex99_1.htm:3]** **[800240_0000950170-25-027325_odp-ex99_1.htm:4]** **[800240_0000950170-25-027325_odp-ex99_1.htm:5]** **[800240_0000950170-25-027325_odp-ex99_1.htm:6]** **[800240_0000950170-25-027325_odp-ex99_1.htm:16]** **[800240_0000950170-25-027325_odp-ex99_1.htm:17]** **[800240_0000950170-25-027325_odp-ex99_1.htm:19]**; Q3 2024 8-K **[800240_0000950170-24-121799_odp-ex99_1.htm:0]** **[800240_0000950170-24-121799_odp-ex99_1.htm:1]** **[800240_0000950170-24-121799_odp-ex99_1.htm:4]** **[800240_0000950170-24-121799_odp-ex99_1.htm:5]** **[800240_0000950170-24-121799_odp-ex99_1.htm:12]** **[800240_0000950170-24-121799_odp-ex99_1.htm:14]** **[800240_0000950170-24-121799_odp-ex99_1.htm:15]** **[800240_0000950170-24-121799_odp-ex99_1.htm:17]**  
- Additional press releases: Sobel Westex **[800240_9be3a2a6433d42adb4f7e07736ca9e42_0]**, Hunter Amenities **[800240_491bf55213de4c599c1009fa8f6a16e4_0]**, CoreTrust **[800240_20250306CL35114:0]**  

S&P Global estimates disclaimer: Values marked with * are retrieved from S&P Global.```