The ODP Corporation (NASDAQ:ODP) shares are trading lower on Wednesday after the company reported second-quarter results.
The company reported adjusted earnings per share of 56 cents, missing the analyst consensus of $1.20.
Total reported sales reached $1.717 billion, a 10% decrease year over year. Sales missed the street view of $1.762 billion.
This decline is mainly due to reduced sales in the Office Depot Division, which had 58 fewer retail locations and fewer transactions than the previous year, along with lower ODP Business Solutions Division sales.
Adjusted operating income was $33 million, down from $67 million in the second quarter of 2023.
"While we are pacing below our prior expectations for the year, we are not standing still. We're taking actions to improve our top-line trajectory and we remain focused on capturing the long-term opportunities derived by our strong value proposition, solid balance sheet, and flexible foundation," said Gerry Smith, chief executive officer of ODP.
"We have several prospects at both ODP Business Solutions and Veyer that we expect to close in the second half that will boost revenue growth velocity as we exit this year," Smith added.
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The company registered adjusted EBITDA of $57 million, compared to $95 million in the year-ago period.
Total available liquidity was $831 million, including $190 million in cash and cash equivalents, with $10 million classified under current assets held for sale from the Varis Division at quarter-end.
"In addition to our efforts under Project Core, which we expect will create over $100 million in annual cost savings when fully implemented, we are executing on initiatives to accelerate sales pipeline conversion, drive additional avenues for growth with existing customers, and leverage our deep customer relationships to solve more of their procurement challenges," Smith added.
Outlook: ODP has revised its FY24 outlook, lowering the adjusted EPS forecast to $4.25-$5.00 from $6.30-$6.60, below the $6.37 estimate, and reducing the revenue forecast to at least $7 billion from $7.44 billion, compared to the $7.39 billion estimate.
Price Action: ODP shares are trading lower by 33.8% to $25.11 at last check Wednesday.
Photo via Wikimedia Commons
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