BOCA RATON, Fla. - The ODP Corporation (NASDAQ:ODP), a leading provider of business solutions, products, and technology services, reported its fourth-quarter earnings, revealing mixed results.
The company announced an adjusted EPS of $0.92, surpassing analyst expectations by $0.18, as consensus estimates were at $0.74. However, revenue fell short of forecasts, with the company bringing in $1.81 billion against the anticipated $1.84 billion.
The fourth-quarter revenue represented a 14% decline from the same period last year, with the drop primarily attributed to the Office Depot (NASDAQ:ODP) consumer division, which saw a reduction in retail locations and consumer traffic. Despite the revenue shortfall, the adjusted EPS saw an 8% increase on a per-share basis compared to the previous year's $0.85, signaling a stronger profitability under challenging conditions.
ODP Corporation's CEO Gerry Smith commented on the results, highlighting the company's resilience amidst a tough macroeconomic environment and their commitment to a low-cost business model and disciplined capital allocation. Smith also announced "Project Core," an enterprise-wide program aimed at streamlining operations and enhancing focus on core business, which is expected to generate annualized savings of $50 million to $60 million upon full implementation.
Looking ahead, ODP Corporation provided guidance for the fiscal year 2024, projecting an adjusted EPS range of $5.60 to $5.80, which brackets the analyst consensus of $5.70. The company also anticipates a sales decline of 2% to 5%, reflecting continued store footprint consolidation and the impact of macroeconomic conditions.
The full-year 2023 results also showed a decline in sales compared to the previous year, with a total reported sales of $7.8 billion, down from $8.5 billion. However, the company managed to increase its adjusted net income from continuing operations to $223 million, or an adjusted diluted EPS of $5.60, up from $216 million or $4.40 in the prior year.
As part of its capital allocation strategy, ODP Corporation repurchased 6 million shares for $298 million in 2023 and announced a new $1 billion share repurchase authorization. The company's focus on operational excellence and cash flow management was evident as it ended the year with $1.1 billion in total available liquidity.
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