ODP Corporation's Q2 2025: Navigating Contradictions in Tariffs, B2B Growth, and Cash Flow Expectations

Tariff exposure and strategy, B2B market share and growth expectations, free cash flow expectations, new contracts and B2B growth projections, new business onboarding and contract progress are the key contradictions discussed in The ODP Corporation's latest 2025Q2 earnings call.



Improved Performance and Strategic Focus:
- The ODP Corporation's Q2 2025 results showed improved year-over-year trends in its B2B business, with a sequential and year-over-year improvement in comparable revenue trends by approximately 200 basis points.
- This was driven by the successful onboarding of new business wins, such as CoreTrust, and stronger demand from new customers despite ongoing softness in general enterprise spending.

Retail Segment Strength and Optimization:
- Office Depot's reported sales were $716 million in the quarter, with a comparable same-store sales decline of 5% year-over-year, but showing a 200 basis points improvement compared to last year's second quarter.
- The improvement was attributed to targeted sales initiatives, operational excellence, and improved product categories like paper, despite a reduction in store count due to planned closures.

Hospitality Market Expansion:
- The hospitality segment began contributing to ODP's results, with sales from this sector rising by a low double-digit percentage.
- This growth was driven by the company's strategic partnership with a major hotel management organization, onboarding over 1,000 new hotel properties, and an expanded product offering.

Cash Flow and Balance Sheet Strength:
- The company generated $13 million in adjusted free cash flow for the second quarter, more than double the amount generated in the same period last year.
- This was achieved through effective cash management, inventory optimization, and strong performance in both B2B and consumer segments, despite typical inventory buildouts ahead of the back-to-school season.