ODP 2025 Q1 Earnings Sharp Net Loss Amid Revenue Decline

The ODP Corporation reported its first-quarter 2025 earnings on August 6, 2025, revealing a significant shift in performance compared to the prior year. The company swung to a loss of $0.97 per share, a dramatic 331.0% negative change from a $0.42 per share profit in 2024. The results were below expectations, with no guidance adjustment provided beyond second-quarter expectations.

Revenue
Total revenue for Q1 2025 fell by 9.1% to $1.70 billion, compared to $1.87 billion in the prior-year period. The decline was spread across key segments, with the Office Depot Division reporting $832 million in sales. The Business Solutions Division accounted for $850 million in revenue, slightly ahead of the consumer-focused division. Veyer, the company’s smaller segment, contributed $17 million to the total, reflecting a continuation of its modest contribution.

Earnings/Net Income
ODP swung to a net loss of $29 million in 2025 Q1, compared to a net income of $15 million in 2024 Q1, marking a 293.3% deterioration in profitability. The EPS of $0.97 reflects a substantial drop from the prior year's $0.42, indicating a significant underperformance in earnings power.

Price Action
The stock price of ODP has edged up 1.05% during the latest trading day, 2.62% during the most recent full trading week, and 2.29% month-to-date.

Post Earnings Price Action Review
The strategy of buying ODP shares on the earnings release date after a revenue raise and selling 30 days later delivered moderate returns but underperformed the market. The strategy’s CAGR was 2.36%, trailing the benchmark by 58.65%. With a maximum drawdown of 0.00% and a Sharpe ratio of 0.07, the strategy had minimal risk but lacked significant growth potential.

CEO Commentary
Gerry Smith, Chief Executive Officer of The ODP Corporation, highlighted disciplined execution and operational excellence as key drivers of improved performance, noting stronger adjusted free cash flow generation and revenue trends across both consumer and B2B segments. He emphasized a 200-basis point year-over-year revenue improvement in the B2B distribution business and meaningful same-store sales growth in the consumer segment, attributing these to targeted strategies and new customer acquisition. Smith expressed optimism about continued performance in the second half of 2025, with a focus on penetrating the hospitality sector and strengthening the balance sheet through cash generation.

Guidance
The company expects continued strength in its consumer segment and improved revenue trends in the B2B distribution business as new customer onboarding and hospitality sector expansion progress. ODP anticipates significantly higher adjusted free cash flow in 2025 compared to the prior year, driven by a strong focus on cash generation. The outlook emphasizes ongoing execution of its core strategy to deliver long-term shareholder value, with no specific quantitative guidance provided beyond the second-quarter results.

Additional News
On August 6, 2025, ODP Corporation announced the release of its second quarter 2025 earnings. The update serves as a follow-up to the Q1 earnings report and signals the company’s continued focus on transparency and regular financial updates. While no specific financial metrics were disclosed in the announcement, the timing aligns with the company’s broader strategic communications plan. This release will likely provide further clarity on Q1 performance trends and progress in key areas such as customer acquisition and operational efficiency. The lack of additional details suggests the company is maintaining a measured approach to guidance, preferring to release structured updates on a quarterly basis.