| Imagery Source: Wikimedia Commons / Coolcaeser |
| Information Source: The ODP Corporation |
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Second Quarter Revenue of $1.6 Billion with GAAP EPS of $0; Adjusted EPS of $0.51 |
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GAAP Operating Income of $9 Million; Net Income of $0; Operating Cash Flow of $16 Million |
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Adjusted EBITDA of $47 Million; Adjusted Free Cash Flow of $13 Million |
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B2B Distribution and Consumer Divisions Drove Improved Performance Trends |
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Progress on Long-Term Growth Initiatives |
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Provides Additional Guidance for 2025 |
| The ODP Corporation (“ODP,” or the “Company”) (NASDAQ: ODP), a leading provider of products, services, and technology solutions to businesses and consumers, today announced results for the second quarter ended June 28, 2025. |
| Second Quarter 2025 Summary(1)(3) |
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| “Our team’s disciplined execution and focus on operational excellence resulted in another quarter of improved performance,” said Gerry Smith, Chief Executive Officer of The ODP Corporation. “During the quarter, we drove improved revenue trends and delivered solid operating results, highlighted by stronger adjusted free cash flow generation. These results reflect ongoing improvements across both our consumer and B2B businesses.” |
| “In our consumer segment, we meaningfully improved same-store sales trends versus last year, underscoring the effectiveness of our targeted sales strategies and strong value proposition. Meanwhile, in our B2B distribution business, we achieved approximately a 200-basis point improvement in year-over-year revenue trends, driven by stronger sales traction with new customers and early contributions from our expansion into the hospitality sector. Sales trends improved month over month throughout the quarter, improving our position as we head into the second half of the year.” |
| “On a consolidated basis, our strong performance resulted in solid adjusted EBITDA and drove adjusted free cash flow more than double last year’s level, further strengthening our balance sheet.” |
| “As we look to the second half of the year, we remain confident in our ability to drive continued improvement and value creation. We expect continued strength in performance in our consumer segment while driving improved revenue trends in our B2B distribution business, as we continue to onboard new customers and begin to penetrate the hospitality segment. Additionally, with our strong focus on cash, we expect to generate significantly higher adjusted free cash flow versus last year, further strengthening our foundation and balance sheet. We remain committed to executing our core strategy and delivering long-term shareholder value,” Smith added. |
| Balance Sheet and Cash Flow |
| As of June 28, 2025, ODP had total available liquidity of $658 million, consisting of $177 million in cash and cash equivalents and $481 million of available credit under the Fourth Amended Credit Agreement. Total debt was $245 million. |
| For the second quarter of 2025, cash provided by operating activities of continuing operations increased to $16 million, which included $9 million in restructuring spend, compared to cash used by operating activities of continuing operations of $1 million in the second quarter of the prior year, which included $25 million in restructuring spend. The year-over-year increase in operating cash flow is primarily related to operational discipline, including strong cash conversion, as well as prudent working capital management, helping to offset the impact of lower sales. |
| Capital expenditures were $12 million in the second quarter of 2025 versus $19 million in the prior year period, as the Company continued to prioritise capital investments towards B2B growth opportunities supporting its supply chain operations, distribution network, and digital capabilities. Adjusted Free Cash Flow(3) was $13 million in the second quarter of 2025, up compared to $5 million in the prior year period. |
| “Our team’s focus on operational discipline and cash conversion helped us generate $13 million in adjusted free cash flow for the quarter—a 160% increase over last year,” said Adam Haggard, co-CFO of The ODP Corporation. “The changes we are making to our business model have resulted in stronger cash generation year-to-date and have helped us pay down approximately $35 million in debt so far this year, further strengthening our balance sheet. We remain committed to disciplined capital allocation in our core business, while pursuing higher growth opportunities in our traditional segments and attractive new industries like hospitality. We are also sharpening our focus on inventory management opportunities, which we expect will enhance future cash generation. We believe this strategy positions ODP to maximise cash flow and provides a pathway for long-term sustainable growth and value creation.” |
| Hospitality Industry Progress |
| As previously announced, ODP Business Solutions has formed a strategic partnership with one of the world’s largest hotel management organisations, becoming a preferred provider for OS&E. This agreement positions ODP as a reliable distribution partner, supporting the recurring in-room hotel supply needs of its over 15,000 members. This partnership underscores ODP’s evolution beyond office supplies and highlights its ability to deliver tailored solutions to businesses in the hospitality, healthcare, and adjacent sectors. |
| The Company continues to make solid progress in expanding its presence within the hospitality sector, leveraging strategic relationships with leading suppliers, including Sobel Westex and Hunter Amenities, broadening access to a diverse range of premium products and elevating service for hospitality clients. During the quarter, ODP Business Solutions added key leadership and sales talent with significant prior hospitality experience and success. Additionally, the Company onboarded approximately one thousand new properties under its current agreement, which will help drive longer-term growth. In the initial phase of its launch, the Company is seeing solid early demand for its OS&E product offering, resulting in robust month-over-month growth in hospitality categories in the quarter. Furthermore, the expanded product assortment is driving increased sales of traditional office products among hospitality customers. |
| The Company is also actively engaged in discussions with several additional major hospitality organisations to become a primary supplier of OS&E products for both company-owned and franchised locations. |
| “We are very encouraged by the early momentum we are seeing as we enter the hospitality market segment,” said Gerry Smith. “Our progress demonstrates strong demand for our hospitality solutions and the high-touch, reliable service that supports them. Furthermore, this expanded offering is driving increased interest in our traditional office products among hospitality customers. We are rapidly onboarding new customers in this segment and are actively pursuing opportunities to further expand our reach in the sector, making progress on discussions with several additional leading hospitality management companies. We believe the progress we are making will be reflected in our future results and will further strengthen our foundation for long-term, profitable growth.” |
| “Optimise for Growth” B2B Revenue Acceleration Plan |
| In the second quarter of 2025, the Company advanced its “Optimise for Growth” restructuring plan, an initiative aimed at reducing fixed-cost infrastructure while leveraging core strengths to accelerate growth in B2B market segments. This includes expansion into new enterprise verticals such as hospitality, healthcare, and other adjacent sectors. |
| In connection with this plan in the second quarter of 2025, the Company recognised $12 million of restructuring expense primarily related to severance costs and the closure of 23 retail stores, three distribution facilities, and one satellite location. In total, over the multi-year life of the plan, the Company expects to incur costs in the range of $185 million to $230 million, which we anticipate will generate approximately $380 million in EBITDA improvement and generate over $1.3 billion in total value. |
| Commentary Regarding 2025 Outlook |
| For the second half of the year, the Company expects to deliver continued improvement in performance, driven by: |
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| Estimated Adjusted Free Cash Flow for the full year 2025 is a non-GAAP measure. This measure excludes charges not indicative of core operations, such as cash charges associated with its Optimise for Growth plan and other significant items that currently cannot be predicted without unreasonable efforts. The exact amount of these charges is not currently determinable, but may be significant. Accordingly, the Company is unable to provide an equivalent GAAP measure or reconciliations from GAAP to non-GAAP for Adjusted Free Cash Flow for the full year 2025. |
| “We are encouraged by our improved performance and progress in the first half of the year, and we remain optimistic about driving further improvements in areas of our business in the second half,” added Smith. “Our outlook considers stable macroeconomic and business conditions. Additionally, while we are not immune to changes in the evolving tariff landscape, we believe that we are well-positioned to adjust as necessary to limit potential impacts to our business.” |
| “We remain committed to executing our core strategy and capitalising on the many opportunities ahead. By leveraging our strong asset base, we are driving growth in our core B2B business and expanding into higher-growth industries such as hospitality. At the same time, we are maximising value and cash generation in our consumer business and reducing our fixed cost infrastructure, which we expect will positively impact margins in future years. Overall, we are strengthening our foundation and improving our positioning to drive future profitable growth and cash flow generation,” Smith added. |
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| The ODP Corporation |
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The ODP Corporation: Announces Second Quarter 2025 Results
