BOCA RATON, Fla. - ODP Corporation (NASDAQ:ODP) reported third quarter adjusted earnings and revenue that fell short of analyst expectations, as the office supplies retailer faced challenging macroeconomic conditions and reduced consumer spending. The company also lowered its full-year outlook.
ODP posted adjusted earnings per share of $0.71 for Q3, missing the analyst consensus estimate of $1.60 by a wide margin. Revenue came in at $1.78 billion, down 11% YoY and below the $1.82 billion analysts were expecting.
"Our results in the quarter were below expectations, primarily driven by our retail division, as challenging macroeconomic conditions impacted our performance," said CEO Gerry Smith. He noted that weaker economic conditions led to more cautious consumer and business spending, affecting demand during the key back-to-school season.
The company's ODP Business Solutions division saw sales decline 8% to $916 million, while Office Depot (NASDAQ:ODP) retail sales fell 15% to $852 million. ODP closed 9 retail stores in the quarter, ending with 885 locations.
Looking ahead, ODP lowered its full-year 2024 guidance. The company now expects adjusted EPS of $3.10-$3.80, down from its prior outlook and below the $4.27 consensus. Revenue is projected at approximately $7 billion, also reduced from previous guidance and under the $7.09 billion analysts were forecasting.
Despite the weak quarter, Smith highlighted progress on the company's B2B pivot, including winning a major multi-year contract potentially worth up to $1.5 billion over 10 years. ODP is pursuing growth opportunities in new adjacent industry segments leveraging its supply chain and distribution capabilities.
The company repurchased $102 million of shares during Q3 as part of its $1 billion buyback program. However, ODP said it expects to "substantially moderate the pace of share repurchases" going forward as it prioritizes investments in core B2B growth initiatives.
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