The ODP Corp., a major provider of office products and services under the Office Depot brand, reported mixed results for the second quarter ending June 28, as challenges in its retail business weighed on sales, while its B2B and hospitality divisions showed encouraging progress.
ODP’s sales for the quarter totaled $1.6 billion, down 8% compared to the same period last year. The decline was caused by fewer retail stores following closures, lower consumer foot traffic, and reduced spending by business customers. Despite the drop in sales, the company’s profit from ongoing operations increased sharply, rising 75% to $15 million, thanks to improved efficiency across both its retail and business-to-business operations.
For the first half of the year, ODP recorded $3.2 billion in sales, down 7% from 2024, while profit more than doubled to $39 million.
CEO Gerry P. Smith pointed to the company’s ongoing “optimize for growth” strategy, which focuses on cutting costs, boosting efficiency, and shifting resources toward faster-growing business areas. “This approach helped cushion the impact of softer demand and sets us up for future growth,” Smith said.
ODP’s business solutions division, which serves mid-sized and large companies, generated $859 million in revenue in the quarter, a 6% decline from last year but with signs of steady improvement. The division benefited from new customer wins and steady demand, despite broader market softness.
Smith highlighted the onboarding of CoreTrust, a purchasing group representing more than 3,500 businesses, as a key growth opportunity. “CoreTrust and other recent wins should add momentum in the second half of the year,” he said.
ODP’s emerging hospitality business, which supplies essential hotel operating, is making inroads. Since partnering six months ago with a major global hotel management company, ODP has added about 1,000 hotel properties and expanded its offerings to include linens, amenities, and other essentials.
“We’re encouraged by early demand and growing interest in our office product lineup among hospitality customers,” Smith noted.
The retail segment posted $716 million in sales, down 10% year-over-year, impacted by about 60 store closures and softer consumer traffic. Still, sales at stores that remained open showed improvement, declining 5% compared to a 7% drop the previous year.
Smith credited targeted sales efforts and operational changes under the company’s growth strategy for this progress. “When accounting for changes in our online marketplace last year, comparable store sales show even stronger gains,” he added.
ODP’s supply chain and logistics division, Veyer, continues to grow, with revenue from outside customers nearly doubling and profitability improving. Smith emphasized ongoing efforts to reduce fixed costs and improve operations, particularly as the company deepens its hospitality market focus.
Looking ahead, the company expects to maintain momentum in its business-to-business distribution and continue strengthening its retail operations. Smith remains optimistic, saying, “We’re confident that our strategy and focus will create lasting value despite a challenging economic backdrop.”
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