BOCA RATON, Fla. - The ODP Corporation (NASDAQ:ODP), a leading provider of business services, products, and digital workplace technology solutions, reported a decline in first-quarter earnings and revenue, missing Wall Street expectations.
The company posted adjusted earnings per share (EPS) of $1.05 for the quarter, falling short of the analyst consensus of $1.66. Revenue also came in below expectations at $1.87 billion compared to the anticipated $1.95 billion.
The company's stock edged down 1% following the earnings release, reflecting investor reaction to the shortfall in results. Despite the slower-than-expected start to the year, ODP Corporation remains confident in its operational excellence and reaffirmed the lower end of its full-year sales guidance.
ODP Corporation's first-quarter revenue of $1.9 billion represents an 11% decrease from the same quarter last year, primarily due to lower sales in its Office Depot (NASDAQ:ODP) Division. The division was affected by 56 fewer retail locations and reduced transactions, as well as a decrease in sales from its ODP Business Solutions Division.
The decline in ODP Business Solutions sales was largely attributed to a cautious spending environment and ongoing delays in onboarding new customers.
GAAP operating income for the quarter was $18 million, a significant drop from $95 million in the first quarter of the previous year. The company's net income from continuing operations also decreased to $15 million, or $0.40 per diluted share, compared to $72 million, or $1.71 per diluted share, in the prior year.
CEO Gerry Smith commented on the results, "This quarter, we launched and are accelerating our Project Core initiatives positioning us to offset the impact of an ongoing challenging macroeconomic and business environment."
He added, "Despite our slower than expected start to the year, we remain confident in our operational excellence approach and committed to achieving our guidance for the full year 2024."
Looking ahead, ODP Corporation updated its full-year guidance for 2024, projecting adjusted EPS of $6.30-$6.60, which is above the analyst consensus of $5.67. The company is accelerating its Project Core plan to generate higher in-year cost savings and future annualized run-rate savings in excess of $100 million.
The ODP Corporation's focus remains on driving its low-cost business model, leveraging multiple routes to market, and executing its capital allocation plan as it navigates through a challenging macroeconomic landscape.
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