Thursday, August 08, 2024
Office Depot, Inc., together with its subsidiaries, supplies a range of office products and services. It offers merchandise, such as general office supplies, computer supplies, business machines and related supplies, and office furniture through its chain of office supply stores under the Office Depot, Foray, Ativa, Break Escapes, Worklife, and Christopher Lowell brand names. The company also provides graphic design, printing, reproduction, mailing, shipping, and other services through design, print, and ship centers. It has operations throughout North America, Europe, Asia, and Central America. The company also sells its products and services through direct mail catalogs, contract sales force, Internet sites, and retail stores, through a mix of company-owned operations, joint ventures, licensing and franchise agreements, alliances, and other arrangements. As of December 31, 2008, Office Depot operated 1,267 North American retail division office supply stores and 162 international division retail stores, as well as participated under licensing and merchandise arrangements in 98 stores. The company was founded in 1986 and is based in Boca Raton, Florida.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
2Q24 Results. The Company reported lackluster operating results that were largely driven by a challenging macroeconomic environment. Revenue of $1.72 billion, adj. EBITDA of $57 million, and net income of negative $4 million, or negative $0.12 per share, all experienced y-o-y decreases. Notably, ODP shares were down roughly 35% at market close, which, in our opinion was an overreaction, spurred on by recessionary concerns.
Veyer gains traction. During the earnings call management highlighted that Veyer received a verbal agreement from a large e-commerce company that has the potential to nearly double the segment’s top line. Notably, the agreement pertains to warehousing and the company’s well established supply chain. Importantly, we view the contract as a significant development that has the ability to favorably alter the Company’s trajectory.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
