The ODP (ODP) Q2 2025 Earnings Call August 06, 2025 09:00 AM ET Speaker0Good morning, and welcome to The ODP Corporation's Second Quarter twenty twenty five Earnings Conference Call. All lines will be on a listen only mode for today's call, after which instructions will be given to ask a question. At the request of The Corporation, today's call is being recorded. I would like to introduce Tim Perrott, Vice President, Investor Relations and Treasurer. Mr.Perrott, you may now begin.Speaker1Good morning and th ...

Q120Second Quarter 2025 Financial Results v Safe Harbor Statement The Private Securities Litigation Reform Act of 1995, as amended, (the "Act"), provides protection from liability in private lawsuits for "forward-looking" statements made by public companies under certain circumstances, provided that the public company discloses with specificity the risk factors that may impact its future results. The Company wants to take advantage of the "safe harbor" provisions of the Act. Certain statements made during t ...

Exhibit 99.1 CONTACT: Tim Perrott Investor Relations 561-438-4629 Tim.Perrott@theodpcorp.com The ODP Corporation Announces Second Quarter 2025 Results Second Quarter Revenue of $1.6 Billion with GAAP EPS of $0; Adjusted EPS of $0.51 GAAP Operating Income of $9 Million; Net Income of $0; Operating Cash Flow of $16 Million Adjusted EBITDA of $47 Million; Adjusted Free Cash Flow of $13 Million B2B Distribution and Consumer Divisions Drove Improved Performance Trends Progress on Long-Term Growth Initiatives Pro ...

Company Performance - ODP Corp. ended the recent trading session at $18.18, showing a -3.35% change from the previous day's closing price, underperforming the S&P 500's daily gain of 0.07% [1] - The company's shares gained 5.38% over the previous month, outperforming the Retail-Wholesale sector's gain of 5.27% but underperforming the S&P 500's gain of 5.71% [1] Earnings Forecast - ODP Corp. is scheduled to release its earnings report on August 6, 2025, with projected earnings per share (EPS) of $0.33, reflecting a 41.07% decrease from the same quarter last year [2] - The consensus estimate anticipates revenue of $1.57 billion, indicating an 8.39% decline from the same quarter last year [2] - For the full year, analysts expect earnings of $3.03 per share and revenue of $6.58 billion, marking changes of -8.18% and -5.83% respectively from last year [3] Analyst Estimates and Rankings - Recent modifications to analyst estimates for ODP Corp. indicate the changing nature of near-term business trends, with upward revisions reflecting analysts' positivity towards the company's operations [4] - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), currently ranks ODP Corp. at 3 (Hold), with no change in the Zacks Consensus EPS estimate over the past month [6] Valuation Metrics - ODP Corp. has a Forward P/E ratio of 6.22, which is a discount compared to the industry average Forward P/E of 14.33 [7] - The company has a PEG ratio of 0.44, significantly lower than the industry average PEG ratio of 3.08 [7] Industry Context - The Retail - Miscellaneous industry, part of the Retail-Wholesale sector, currently holds a Zacks Industry Rank of 198, placing it in the bottom 20% of all industries [8]

Group 1 - The ODP Corporation (NASDAQ: ODP), which operates Office Depot, may surprise analysts and investors with its upcoming quarterly results, although it is unlikely to impress them significantly [1] - Recent consumer and corporate behavior indicates a trend of frontloading purchases, which could impact ODP's performance [1] - The analysis emphasizes the importance of observing megatrends and technological advancements to identify investment opportunities, while also stressing the need to focus on fundamentals and company details [1] Group 2 - The analyst has no current stock or derivative positions in ODP but may consider initiating a short position within the next 72 hours [2] - The article reflects the author's personal opinions and is not influenced by any compensation from companies mentioned [2]

Company Performance - ODP Corp. (ODP) stock increased by 1.87% to $18.25, outperforming the S&P 500's daily gain of 0.54% [1] - Over the past month, ODP shares gained 8.12%, surpassing the Retail-Wholesale sector's gain of 2.05% and the S&P 500's gain of 4.2% [1] Upcoming Earnings - ODP Corp. is expected to report an EPS of $0.33, reflecting a 41.07% decrease from the same quarter last year [2] - Revenue is forecasted to be $1.57 billion, indicating an 8.39% decline compared to the year-ago quarter [2] Full Year Projections - Zacks Consensus Estimates predict earnings of $3.03 per share and revenue of $6.58 billion for the full year, representing changes of -8.18% and -5.83% from the previous year [3] - Recent changes in analyst estimates for ODP Corp. are crucial for investors, as positive revisions indicate optimism about the business [3] Valuation Metrics - ODP Corp. has a Forward P/E ratio of 5.92, which is lower than the industry average Forward P/E of 13.54 [6] - The company has a PEG ratio of 0.42, compared to the Retail - Miscellaneous industry's average PEG ratio of 2.88 [6] Industry Context - The Retail - Miscellaneous industry, part of the Retail-Wholesale sector, has a Zacks Industry Rank of 183, placing it in the bottom 26% of over 250 industries [7] - The Zacks Industry Rank measures the strength of industry groups based on the average Zacks Rank of individual stocks, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Group 1 - The article discusses a micro-cap office supply distributor that is currently experiencing declining revenues and has a weary brand image, but there are underlying opportunities in its B2B distribution model [1] - The independent trader and analyst specializes in identifying high-growth, underanalyzed companies using a combination of technical analysis and the CAN SLIM method, focusing on financial trends and profit growth [1] - Key indicators prioritized in the research approach include relative strength, trading volume shifts, and accelerating profit growth, which help in identifying stocks with significant upside potential [1] Group 2 - The article emphasizes the importance of structured research in enhancing market understanding and providing actionable investment insights, particularly through in-depth company analyses [1]

Core Concept - The price-to-book (P/B) ratio is a key metric for value investors to identify undervalued stocks with potential for exceptional returns, calculated as market price per share divided by book value per share [1][5] Understanding Book Value - Book value represents the total value remaining for shareholders if a company were to liquidate its assets after settling all liabilities, calculated by subtracting total liabilities from total assets [3][4] P/B Ratio Insights - A P/B ratio under 1.0 indicates a potentially undervalued stock, while a ratio above 1.0 suggests overvaluation [5][6] - Stocks with low P/B ratios can indicate strong growth prospects, but a low ratio may also reflect weak asset returns or overstated assets [7][8] Screening Parameters for Value Stocks - Stocks should have a P/B ratio lower than the industry median, a P/S ratio below the industry median, and a P/E ratio using F(1) estimates lower than the industry median [11][12] - A PEG ratio under 1 indicates undervaluation relative to growth prospects, and stocks must trade at a minimum price of $5 [13] - High trading volume and favorable Zacks Rank (1 or 2) are also important criteria for screening [14] Identified Low P/B Stocks - Centene Corporation (CNC) has a projected 3-5 year EPS growth rate of 11.5% and holds a Zacks Rank of 2 with a Value Score of A [16] - CVS Health (CVS) has a projected EPS growth rate of 11.4% and also holds a Zacks Rank of 2 with a Value Score of A [16] - The ODP Corporation (ODP) has a projected EPS growth rate of 14% and holds a Zacks Rank of 1 with a Value Score of A [17] - StoneCo (STNE) has a projected EPS growth rate of 25.3% and holds a Zacks Rank of 2 with a Value Score of B [18] - Paysafe Limited (PSFE) has a projected EPS growth rate of 17.9% and holds a Zacks Rank of 1 with a Value Score of A [19]

Core Viewpoint - ODP Corp. is currently viewed as a more attractive investment option compared to Ulta Beauty for value investors, based on various financial metrics and rankings [3][7]. Valuation Metrics - ODP Corp. has a forward P/E ratio of 5.92, significantly lower than Ulta Beauty's forward P/E of 19.46 [5]. - The PEG ratio for ODP is 0.42, indicating a more favorable growth outlook compared to Ulta Beauty's PEG ratio of 2.76 [5]. - ODP's P/B ratio stands at 0.68, while Ulta Beauty's P/B ratio is considerably higher at 8.48 [6]. Investment Rankings - ODP Corp. holds a Zacks Rank of 1 (Strong Buy), whereas Ulta Beauty has a Zacks Rank of 3 (Hold) [3]. - ODP has experienced stronger estimate revision activity, suggesting a more positive earnings outlook compared to Ulta Beauty [7]. Value Grades - ODP Corp. has been assigned a Value grade of A, while Ulta Beauty has a Value grade of C, reflecting ODP's superior valuation metrics [6].

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point, as stocks may lose momentum when their valuations exceed future growth potential [2] - Investing in bargain stocks that have recently shown price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify potential opportunities [3] Group 2: ODP Corp. Analysis - ODP Corp. has shown a price increase of 0.3% over the past four weeks, indicating growing investor interest [4] - The stock has gained 11.8% over the past 12 weeks, with a beta of 1.32, suggesting it moves 32% higher than the market [5] - ODP has a Momentum Score of A, indicating a favorable time to invest based on momentum [6] - The stock has received a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which attract more investors [7] - ODP is trading at a low Price-to-Sales ratio of 0.07, meaning investors pay only 7 cents for each dollar of sales, indicating a reasonable valuation [7] Group 3: Additional Investment Opportunities - Besides ODP, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]