Core Insights - ODP Corp. reported quarterly earnings of $1.14 per share, exceeding the Zacks Consensus Estimate of $0.82 per share, and showing an increase from $0.71 per share a year ago, resulting in an earnings surprise of +39.02% [1] - The company posted revenues of $1.63 billion for the quarter ended September 2025, which was below the Zacks Consensus Estimate by 2.66% and a decrease from $1.78 billion year-over-year [2] - ODP Corp. shares have increased approximately 22.3% year-to-date, outperforming the S&P 500's gain of 15.1% [3] Earnings Outlook - The future performance of ODP Corp. stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.50 on revenues of $1.58 billion, and for the current fiscal year, it is $2.88 on revenues of $6.53 billion [7] Industry Context - The Retail - Miscellaneous industry, to which ODP Corp. belongs, is currently ranked in the top 29% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - The performance of ODP Corp. may also be influenced by the overall industry outlook, as empirical research shows a strong correlation between stock movements and earnings estimate revisions [5][8]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Financial Performance - Total reported sales for Q3 2025 were $1.6 billion, a 9% decrease compared to the same period last year, primarily due to lower sales in the Office Depot Division and ODP Business Solutions Division [3]. - GAAP operating income was $34 million, down from $102 million in the prior year, with net income from continuing operations of $23 million, or $0.72 per diluted share, compared to $68 million, or $2.04 per diluted share, in Q3 2024 [5]. - Adjusted net income from continuing operations was $36 million, or adjusted diluted earnings per share of $1.14, an increase of 61% on a per share basis compared to $24 million, or $0.71, in the prior year [9]. - Operating income for the 13 weeks ended September 27, 2025, was $34 million, significantly lower than $102 million for the same period in 2024, representing a decline of 67% [28]. - Net income from continuing operations for Q3 2025 was $23 million, or $0.72 per share, compared to $68 million, or $2.04 per share in Q3 2024 [39][40]. - Year-to-date (YTD) 2025 net income from continuing operations was a loss of $6 million, or $(0.21) per share, compared to a profit of $95 million, or $2.65 per share in YTD 2024 [40]. Cash Flow and Liquidity - Operating cash flow from continuing operations increased to $90 million, up from $81 million in the prior year, reflecting strong cash conversion and prudent working capital management [8]. - Total available liquidity was $730 million, consisting of $182 million in cash and cash equivalents and $548 million of available credit [12]. - Adjusted Free Cash Flow for Q3 2025 was $89 million, up from $68 million in the prior year period [14]. - Free cash flow for Q3 2025 was $78 million, up from $58 million in Q3 2024, while adjusted free cash flow increased to $89 million from $68 million [46]. Sales and Revenue Trends - The ODP Business Solutions Division reported sales of $862 million, a 6% year-over-year decline, but showed improved revenue trends compared to the prior year [9]. - Sales for the 13 weeks ended September 27, 2025, were $1,625 million, a decrease of 9% compared to $1,780 million for the same period in 2024 [28]. - The Business Solutions Division reported external sales of $860 million for 3Q25, down 6% from $914 million in 3Q24 [34]. - The Office Depot Division experienced a 13% decline in external sales, reporting $742 million in 3Q25 compared to $852 million in 3Q24 [34]. - The Veyer Division's external sales increased to $23 million in 3Q25, up from $14 million in 3Q24, marking a growth of 64% [34]. Restructuring and Strategic Changes - The Company expects to incur costs of $185 million to $230 million over the multi-year life of the "Optimize for Growth" restructuring plan, which is anticipated to generate approximately $380 million in EBITDA improvement [18]. - The Company closed 12 retail stores during the quarter, ending with 822 retail locations, reflecting ongoing strategic adjustments [16]. - Total retail stores in the U.S. decreased to 822 in Q3 2025 from 885 in Q3 2024, with 12 stores closed in Q3 2025 [48]. - The company incurred $49 million in asset impairments and $57 million in merger and restructuring expenses for YTD 2025 [40]. Asset and Liability Management - The ODP Corporation's total assets decreased to $3,279 million as of September 27, 2025, down from $3,529 million at the end of 2024 [30]. - Total liabilities decreased to $2,456 million as of September 27, 2025, compared to $2,722 million at the end of 2024 [30]. - The ODP Corporation's cash and cash equivalents increased to $182 million as of September 27, 2025, from $166 million at the end of 2024 [30]. Other Financial Metrics - Gross profit for the 39 weeks ended September 27, 2025, was $1,001 million, down from $1,115 million in the prior year, reflecting a decrease of 10% [28]. - Adjusted EBITDA for Q3 2025 was $62 million, consistent with Q3 2024, while YTD 2025 adjusted EBITDA was $184 million compared to $210 million in YTD 2024 [46]. - Q3 2025 reported operating income was $34 million, representing 2.1% of sales, while adjusted operating income was $38 million, or 2.3% of sales [39].

Core Insights - The Covid pandemic highlighted the decline in relevance of office supply stores like Office Depot and Office Max, as consumers turned to alternative sources for essential items like toilet paper [3][4][5] - The shift towards e-commerce and changing consumer habits have significantly impacted the demand for traditional office supplies, leading to store closures and reduced foot traffic [8][9] Group 1: Decline of Office Supply Stores - Office supply stores have become less essential over time due to changing consumer habits and increased competition from e-commerce giants like Amazon and Walmart [4][8] - The chains have closed over 1,110 stores since 2013, with more closures likely as the market continues to evolve [7][8] - The decline in demand for office supplies is attributed to the rise of remote and hybrid work models, which have reduced the need for in-store purchases [8] Group 2: Financial and Operational Changes - ODP Corporation, which owns Office Depot and Office Max, is undergoing a transition to private ownership under Atlas Holdings, aiming for operational efficiency and a leaner cost structure [9][10] - The move to go private may allow ODP to focus on long-term investments in various business areas, potentially strengthening its market position [10] - Financial strain from falling sales has led to restructuring efforts and a planned acquisition by Atlas Holdings [8][9]

Group 1 - Halper Sadeh LLC is investigating ODP Corporation for potential violations related to its sale to an affiliate of Atlas Holdings for $28.00 per share in cash [1] - Air Lease Corporation is under investigation for its sale to Sumitomo Corporation, SMBC Aviation Capital, Apollo, and Brookfield for $65.00 per share in cash [2] - The firm may seek increased consideration for shareholders and additional disclosures regarding the proposed transactions [3] Group 2 - Shareholders are encouraged to contact Halper Sadeh LLC to discuss their legal rights and options at no charge [4] - Halper Sadeh LLC represents investors globally who have experienced securities fraud and corporate misconduct, recovering millions for defrauded investors [4]

Core Viewpoint - The M&A Class Action Firm, led by attorney Juan Monteverde, is investigating ODP Corporation regarding its proposed sale to an affiliate of Atlas Holdings, where shareholders would receive $28.00 in cash per share, raising questions about the fairness of the deal [1]. Group 1: Company Overview - ODP Corporation is under investigation by Monteverde & Associates PC, a firm recognized for recovering millions for shareholders and ranked as a Top 50 Firm in the 2024 ISS Securities Class Action Services Report [1]. - The firm operates from the Empire State Building in New York City and has a successful track record in class action securities litigation [2]. Group 2: Transaction Details - The proposed transaction involves ODP shareholders receiving $28.00 in cash per share, prompting inquiries into the fairness of this offer [1].

Core Insights - Three stocks in the consumer discretionary sector are showing signs of being overbought, which may concern momentum-focused investors [1][2] Company Summaries - **American Public Education, Inc. (NASDAQ: APEI)**: - Analyst Luke Horton from Northland Capital Markets maintained an Outperform rating and raised the price target from $38 to $46 - The stock gained approximately 24% over the past month, reaching a 52-week high of $38.32 - Current RSI value is 77.8, with shares closing at $38.05, reflecting a 1.9% increase [7] - **Grand Canyon Education Inc (NASDAQ: LOPE)**: - Reported better-than-expected second-quarter results on August 6 and raised FY25 guidance above estimates - The stock has increased around 24% over the past six months, with a 52-week high of $214.58 - Current RSI value is 73.4, with shares closing at $214.30, showing a 1.5% gain [8] - **ODP Corp (NASDAQ: ODP)**: - Announced a definitive agreement to be acquired by an affiliate of Atlas Holdings on September 22 - The stock surged approximately 39% over the past month, achieving a 52-week high of $32.20 - Current RSI value is 74.7, with shares closing at $27.97, reflecting a 0.6% increase [8]

Core Insights - Three stocks in the consumer discretionary sector are showing signs of being overbought, which may concern momentum-focused investors [1][2] Company Summaries - **American Public Education, Inc. (NASDAQ: APEI)**: - Analyst Luke Horton from Northland Capital Markets maintained an Outperform rating and raised the price target from $38 to $46 - The stock gained approximately 24% over the past month, reaching a 52-week high of $38.32 - Current RSI value is 77.8, indicating overbought conditions - Recent price action shows shares gained 1.9% to close at $38.05 [7] - **Grand Canyon Education Inc (NASDAQ: LOPE)**: - Reported better-than-expected second-quarter financial results on August 6 and raised FY25 guidance above estimates - The stock has increased around 24% over the past six months, with a 52-week high of $214.58 - Current RSI value is 73.4, also indicating overbought conditions - Recent price action shows shares gained 1.5% to close at $214.30 [8] - **ODP Corp (NASDAQ: ODP)**: - Announced a definitive agreement to be acquired by an affiliate of Atlas Holdings on September 22 - The stock gained approximately 39% over the past month, reaching a 52-week high of $32.20 - Current RSI value is 74.7, indicating overbought conditions - Recent price action shows shares gained 0.6% to close at $27.97 [8]

Core Viewpoint - The proposed sale of The ODP Corporation to an affiliate of Atlas Holdings is under investigation to assess the adequacy of the cash consideration offered to shareholders [1] Company Summary - The ODP Corporation is set to be sold for $28.00 in cash per share to an affiliate of Atlas Holdings [1] - The law firm Kahn Swick & Foti, LLC is conducting an investigation regarding the transaction [1]

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