The ODP Corporation Reports Decline in Financial Performance for Q3 and Year-to-Date 2024

The ODP Corporation reported a decline in financial performance for the third quarter and year-to-date periods ending September 28, 2024, compared to the same periods in 2023. For the 13 weeks ended September 28, 2024, total sales were $1,780 million, down from $2,007 million in the prior year. Gross profit also decreased to $364 million from $472 million. Operating income for the quarter was $102 million, slightly lower than $108 million in Q3 2023. Net income from continuing operations fell to $68 million from $82 million, while net income for the quarter was $58 million, down from $70 million.

For the year-to-date period, total sales reached $5,367 million, a decrease from $6,020 million in 2023. Gross profit for the first three quarters of 2024 was $1,115 million, down from $1,367 million. Operating income for the year-to-date period was $143 million, significantly lower than $279 million in 2023. Net income from continuing operations for the year-to-date period was $95 million, compared to $208 million in the same period last year.

The company’s selling, general, and administrative expenses decreased to $323 million for the third quarter, down from $360 million, and to $974 million year-to-date, down from $1,073 million. However, restructuring expenses surged to $3 million in Q3 2024 from $1 million in Q3 2023, with year-to-date restructuring costs reaching $48 million compared to $2 million in the prior year.

Strategically, ODP Corporation acquired a small independent regional office supply distribution business in Canada for a purchase price between $5 million and $15 million, funded with cash on hand. The company also recognized $70 million of income related to legal matter monetization during the year-to-date period.

As of September 28, 2024, ODP's cash and cash equivalents stood at $181 million, down from $381 million at the end of 2023. Total assets decreased to $3,691 million from $3,887 million, while total liabilities increased to $2,835 million from $2,786 million. The company’s total stockholders’ equity fell to $856 million from $1,101 million.

In terms of operational changes, ODP has been implementing its Project Core restructuring plan, which has incurred significant costs, including $44 million year-to-date. The company also closed eight retail stores in Q3 2024, bringing the total closures to 28 for the year. The Varis Division was classified as discontinued operations starting in Q2 2024 and was sold on October 18, 2024, resulting in a non-cash loss of $81 million year-to-date.