Q2 2024 ODP Corp Earnings Call Transcript
Key Points
- The ODP Corp (ODP) has initiated several strategic growth initiatives, including five major business process improvement projects expected to drive significant growth and profitability in 2025 and beyond.
- Veyer, the company's supply chain business, continues to show strong progress, attracting new third-party customer relationships and driving healthy increases in external EBITDA.
- The company has repurchased over $140 million of stock during the quarter, demonstrating a strong focus on capital allocation and shareholder return.
- Project Core, an enterprise-wide initiative, is on track to achieve annualized run rate savings of at least $100 million, significantly improving the company's position for future growth.
- The ODP Corp (ODP) has a strong balance sheet and liquidity position, ending the quarter with total liquidity of $831 million, allowing flexibility to invest in core business and return capital to shareholders.
- The company's performance in the second quarter was below expectations, impacted by ongoing macroeconomic headwinds and a challenging business environment.
- Revenue for the quarter was down about 10% compared to last year's second quarter, primarily driven by lower sales in Office Depot and ODP Business Solutions.
- GAAP operating income in the quarter was only slightly positive, with adjusted operating income significantly lower than the previous year.
- The company faced delays in onboarding new customers and customer losses, impacting the ability to regain stronger top-line traction.
- The weaker macroeconomic environment reduced consumer and business spending, resulting in lower demand and creating headwinds in efforts to drive better revenue traction.
Good morning, and welcome to The ODP Corporation's second-quarter 2024 earnings conference call. (Operator Instructions) At the request of The ODP 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.
Good morning, and thank you for joining us for The ODP Corporation second-quarter 2024 earnings conference call. This is Tim Perrott, and I'm here with Gerry Smith, our CEO; and Anthony Scaglione, our Executive Vice President and CFO.
During today's call, Gerry will provide an update on the business, focusing much of his commentary on our results and accomplishments for the second quarter of 2024, including our operational performance and the progress we are making on all of our initiatives to drive shareholder value. After Gerry's commentary, Anthony will then review the company's second-quarter financial results, including highlights of our divisional performance. Following Anthony's
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