Thursday, May 08, 2025
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.
Q1 Results. Sales for the first quarter were $1.699 billion compared to $1.869 billion last year but were above our expectations of $1.625 billion. Net loss totaled $29 million, or a loss of $0.97/sh, compared to a net income of $15 million, or $0.40/sh, in the prior year. Adjusted EPS was $1.06, which surpassed our estimate of $0.58/sh, but was lower than $1.31 last year. Adjusted EBITDA of $76 million beat our estimate of $59 million and decreased from $91 million last year.
Favorable Developments. The initial hospitality partnership covers approximately 15,000 potential customer locations within a national hotel management group and is expected to provide a foundation for long-term growth in the segment and adjacent industries. Notably, the company is building inventory and hiring experienced sales personnel to support growth. We believe its actions will drive meaningful growth in the hospitality segment, with meaningful contributions in the second half of 2025.
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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).