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Dec 30, 2023
ODP Q4 2023 Earnings Report
The ODP Corporation reported Q4 2023 results, marked by a decrease in sales but with a focus on cost-saving initiatives and shareholder returns.
Key Takeaways
The ODP Corporation reported a decrease in sales for Q4 2023, driven by lower performance in the Office Depot consumer division due to fewer retail locations and reduced traffic. The company is initiating 'Project Core' to streamline operations and enhance focus on core business, alongside a new $1 billion share repurchase authorization.
Total reported sales decreased by 14% to $1.8 billion, or 9% excluding the impact of the 53rd week in 2022.
GAAP operating loss was $31 million, including non-cash asset impairment charges of $68 million related to goodwill at Varis.
Adjusted net income from continuing operations was $35 million, with adjusted diluted earnings per share of $0.92.
The company repurchased 672 thousand shares at a cost of $32 million during the quarter.
Forward Guidance
The company provided full year guidance for 2024, including a sales decline of 2% - 5%, Adjusted EBITDA of $410 million - $430 million, Adjusted Operating Income of $280 million - $300 million, Adjusted Earnings per Share of $5.60 - $5.80 per share and Adjusted Free Cash Flow greater than $200 million.
Positive Outlook
- Continued store footprint consolidation
- Improving trends in eCommerce channel at Office Depot
- Organic and inorganic growth at ODP Business Solutions
- Continued expansion at Veyer
- Progress at Varis
Challenges Ahead
- Continued macroeconomic conditions challenges
- Cautious on the state of the overall US economy
- Workforce employment concerns
- Consumer spending concerns
Historical Earnings Impact
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Avg. Return Before/After Earnings
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