ODP Corporation (NASDAQ:ODP) reported third-quarter earnings that surpassed analyst expectations on Wednesday, even as revenue declined due to fewer retail locations and softer demand in both its retail and business divisions.
The office supplies retailer posted adjusted earnings of $1.14 per share, well above the consensus estimate of $0.90, while revenue came in at $1.6 billion, missing forecasts of $1.71 billion. Total sales fell 9% year-over-year from $1.78 billion, largely reflecting 63 fewer Office Depot retail stores and reduced foot traffic.
Comparable store sales declined 7%, marking an improvement from the 10% drop in the prior-year quarter. Meanwhile, the ODP Business Solutions Division reported a 6% year-over-year decline, pressured by macroeconomic challenges and weaker enterprise spending.
Despite lower revenue, adjusted EBITDA held steady at $62 million, consistent with last year’s level, as cost controls and efficiency measures offset softer sales. Operating cash flow rose to $90 million, while adjusted free cash flow improved to $89 million, up from $81 million and $68 million, respectively, in the prior-year period.
The company reiterated that its planned acquisition by an affiliate of Atlas Holdings remains on track to close by the end of 2025, pending customary approvals.
ODP closed 12 additional retail stores during the quarter, bringing its total count to 822 from 885 a year ago. The company ended the period with $730 million in total liquidity, including $182 million in cash and cash equivalents.
While declining store traffic continues to weigh on revenue, ODP’s strong profitability, cash flow generation, and disciplined cost management highlight operational resilience ahead of its pending acquisition.