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• Total Revenue: $1.7 billion, a 9% decline compared to the first quarter of last year.

• Adjusted EBITDA: $76 million, compared to $91 million in the prior year's first quarter.

• Adjusted Free Cash Flow: $45 million, more than double the $17 million from the same period last year.

• Operating Cash Flow: $57 million, including $10 million in restructuring spend.

• GAAP Operating Loss: $32 million, compared to GAAP operating income of $41 million in the prior year period.

• Adjusted Operating Income: $54 million, compared to $66 million in last year's first quarter.

• Adjusted Net Income: $32 million or $1.06 per diluted share, compared to $50 million or $1.31 per diluted share in the prior year period.

• Store Closures: 12 retail stores closed in the quarter, with 857 stores remaining at quarter-end.

• Comparable Store Sales: Improved by 500 basis points year-over-year.

• Veyer Third-Party Revenue: $17 million, up 89% over last year.

• Total Liquidity: $653 million, consisting of $185 million in cash and cash equivalents, and $468 million in available credit.

• Total Debt: $262 million.

• Warning! GuruFocus has detected 4 Warning Signs with ODP.

Release Date: May 07, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• The ODP Corp (NASDAQ:ODP) reported a significant increase in adjusted free cash flow, generating $45 million compared to $17 million in the same period last year.

• The company's consumer division, Office Depot, showed improved topline trends and higher margins, contributing to stronger cash flow generation.

• ODP's supply chain business, Veyer, achieved over 85% year-over-year revenue growth from third-party customers, highlighting strong demand for its services.

• The company is making progress in its B2B pivot and expansion into higher-growth segments like hospitality, with new business wins expected to contribute more significantly in the second half of the year.

• ODP maintains a solid balance sheet with total liquidity of $653 million, providing flexibility for future growth initiatives.

Negative Points

• Total revenue for the quarter declined by 9% compared to the first quarter of last year, impacted by fewer stores, reduced retail and online traffic, and lower sales within ODP Business Solutions.

• The company incurred $86 million in charges related to restructuring expenses and asset impairments, resulting in a GAAP operating loss of $32 million.

• ODP's B2B business faced continued soft market demand and the impact of a large customer loss from the previous year, affecting top-line trends.

• Onboarding of new business contracts has been slower than anticipated, delaying their contribution to revenue growth.

• The company is still in the early stages of its expansion into the hospitality market, with inventory build and sourcing taking longer than expected.