ODP Corporation (NASDAQ:ODP) Stock Crashes 20%: Q4 Earnings Miss and Sales Drop Shake Investors

26 February, 2025 | 2 Min Read

tickers: ODP

tickers affected by this

ticker	polarity	why?
ODP	positively	The significant drop in ODP Corporation’s stock price could present a buying opportunity for investors who believe in the company’s long-term potential, If they can assess why the stock dropped so much. Additionally, the company’s shift in focus towards high-return B2B growth opportunities may not immediately improve the stock, but by pursuing profitable strategies and addressing its current economic issues, the stock could potentially benefit in the long run.

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ODP Corporation Stock Plunges Over 20%: Q4 Earnings Miss Expectations

February 26, 2025 ODP Corporation’s shares experienced a significant drop of over 20% following the release of its Q4 earnings report. The company reported adjusted earnings per share (EPS) of 66 cents, falling short of the expected 80 cents. Additionally, sales declined by 10% year-over-year, totaling $1.624 billion, which, although below analyst estimates of $1.610 billion, still represented a decrease from the previous year. The decline in sales was primarily attributed to lower retail and online consumer traffic, as well as reduced average order volumes. The company also noted that 47 fewer stores were in operation compared to the previous year due to planned closures. Fourth-quarter adjusted operating income was $32 million, a decrease from $57 million in the same period last year. CEO Gerry Smith acknowledged the challenges faced in 2024, citing weak macroeconomic trends, subdued business and consumer activity, and severe weather conditions in the second half of the year. The company’s Business Solutions Division saw its operating income margin decrease by 70 basis points to 3%, while the Office Depot Division’s margin fell by 100 basis points to 4%. Looking ahead, ODP Corporation plans to focus on capital allocation toward its core business rather than share repurchases. The company aims to pursue high-return B2B growth opportunities to drive sustainable, long-term value for shareholders. Adjusted Free Cash Flow for the fourth quarter was $(57) million, a significant drop from $48 million in the previous year. The company ended the quarter with cash and equivalents worth $166 million, while long-term debt increased to $270 million from $165 million year-over-year. ODP Corporation shares were trading at $15.12, down 21.21% at the time of publication.