Office Depot Parent ODP Boosts FY24 EPS Outlook Despite Bumpy Q1 Ride: Details
Portfolio Pulse from Shivani Kumaresan
The ODP Corporation (NASDAQ:ODP) reported lower-than-expected Q1 FY24 earnings, with a significant sales decline of 11% year-on-year to $1.87 billion, missing the analyst consensus of $1.96 billion. Despite the downturn, ODP raised its FY24 adjusted EPS outlook from $5.60-$5.80 to $6.30-$6.60, above the consensus of $5.67. The sales decrease was attributed to fewer Office Depot retail locations and reduced transactions. Operating income and adjusted EBITDA also saw declines, while the company continued its share repurchase program, buying back 957 thousand shares for $50 million.
May 08, 2024 | 1:01 pm
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NEGATIVE IMPACT
ODP Corporation reported lower Q1 FY24 earnings and a sales decline but raised its FY24 adjusted EPS outlook, indicating a mixed financial performance.
The immediate negative reaction in premarket trading suggests a short-term bearish outlook for ODP shares, primarily due to the earnings miss and sales decline. However, the raised EPS guidance for FY24 indicates management's confidence in the company's future performance, which could mitigate some of the negative sentiment in the medium to long term. The strategic decision to pursue a sale of Varis and the focus on cost efficiencies through Project Core are positive steps, but the short-term impact remains negative due to the initial earnings disappointment.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100