ODP (ODP 5.41%), the office supply and business solutions company behind Office Depot and OfficeMax, reported its fiscal Q2 2025 earnings on August 6, 2025. The headline news is that adjusted earnings per share (EPS) came in at $0.51, exceeding analyst expectations of $0.36 by $0.15 (Non-GAAP). Revenue of $1,586 million exceeded the average estimate of $1,591.7 million, but fell from $1,717 million in the same period last year. While sales and profits remain lower than a year ago, operational improvements and margin stabilization stood out this quarter. These results reflect progress in both its Consumer (Office Depot) and Business-to-Business (ODP Business Solutions and Veyer) divisions, even as the company faces continued pressure in traditional office supply markets and enterprise spending.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.51 | $0.36 | $0.56 | (8.9%) |
| Revenue | $1,586 million | $1,591.7 million | $1,717 million | (7.6%) |
| Adjusted EBITDA | $47 million | $57 million | (17.5%) | |
| Adjusted free cash flow | $13 million | $5 million | 160.0% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in fiscal Q1 2025 earnings report.
About ODP's business and its key success factors
ODP operates as a leading supplier of office products, business services, and technology solutions. Its business is split into a consumer-focused segment, mainly the Office Depot retail stores, and a business-to-business (B2B) segment including ODP Business Solutions and Veyer, a supply chain logistics division.
Recently, the company has focused on expanding its B2B capabilities, entering new industry verticals like hospitality, and shrinking its physical retail presence. Success for ODP now hinges on maintaining strong brand recognition, diversifying its products and services, managing costs tightly, and adapting its technology and distribution to reach both retail and business customers more efficiently.
Quarter in review: Key developments and data
Revenue declined 8% from the prior year quarter, but the drop in sales is moderating. Adjusted earnings per share (Non-GAAP) were down 8.9% year over year, but importantly, they exceeded estimates by a wide margin, with Non-GAAP EPS of $0.51 beating the analyst estimate of $0.36 by 41.7%, and revenue of $1,586 million exceeding the estimate of $1,591.7 million by 0.52%. Adjusted EBITDA, a Non-GAAP measure of operating performance before certain expenses, also fell year over year but showed evidence of operational discipline amid lower sales.
The B2B ODP Business Solutions division had sales of $859 million, down 6% from a year ago. The company onboarded roughly 1,000 new hotel customers through its hospitality vertical, pointing to growth outside core office supply categories. Notably, sales in product categories adjacent to traditional office supplies made up 45% of the ODP Business Solutions Division’s revenue. Total adjacency category sales, including cleaning and breakroom, furniture, technology, and copy and print, were 45% of total ODP Business Solutions’ sales, up from 44% in the same period last year. However, onboarding of some larger B2B contracts is taking longer than hoped, as noted by management earlier in the year, delaying the full benefit of these wins. The company cited expanded efforts in areas such as cleaning, breakroom, and technology supplies, increasing overall addressable market.
The Office Depot consumer segment recorded $716 million in sales, a 10% year-over-year drop in sales for the Office Depot Division. This decline was mostly attributed to 60 fewer stores and lighter retail and online traffic. Comparable store sales fell 5%, a slower pace than last year’s 7% drop in comparable store sales for fiscal Q2 2024, hinting at stabilization. Targeted promotions and changes in merchandising strategy helped lift metrics like average order size. Twenty-three retail stores closed in the quarter, bringing the count down to 834 locations. Management credits a new “gamified” daily performance system in stores with helping drive improvement.
Veyer, ODP’s logistics and supply chain arm, reported total sales (including intra-company sales) of $1.1 billion. External sales to third-party customers nearly doubled to $19 million. Growth in this division reflects ODP’s push to diversify revenue and capitalize on its distribution footprint. Collectively, these divisions indicate progress in both B2B expansion and operational adaptability, though core categories are still contracting.
The quarter included $13 million in restructuring charges, as the “Optimize for Growth” initiative continues. This multi-year plan carries total projected costs of $185 million–$230 million, as disclosed by management, with targeted improvements in EBITDA of approximately $380 million and total value creation of over $1.3 billion over the multi-year life of the program. Year-over-year selling, general and administrative expense (SG&A) was down $24 million. Capital expenditures fell to $12 million.
On the technology and product front, ODP notes that investment is concentrated on B2B growth and digital transformation. Its nationwide supply chain enables next-day delivery to over 98.5% of the U.S. population, an advantage as it grows in adjacent verticals such as hospitality and logistics (third-party logistics, or 3PL).
The company continues to address risks tied to U.S. tariffs on imported goods, pointing to a proactive sourcing strategy and flexibility to manage or pass on costs. ODP notes its regular review of the tariff situation with dedicated teams. However, management flagged ongoing risks related to restructuring, competition, and industry-wide shifts away from traditional office products.
Looking ahead: Guidance and investor watchpoints
For fiscal 2025, management projects adjusted free cash flow (Non-GAAP) of over $115 million. No revenue or profit guidance was provided for the second half or the full fiscal year. The company stated that top-line trends in B2B should improve in the second half of 2025 as new business, such as the hospitality contracts, is more fully onboarded, and that it expects strong cash generation from its retail segment.
Investors should watch the pace of new contract onboarding in ODP Business Solutions, the continued impact of store closures in the consumer division, and progress on the Optimize for Growth restructuring plan. Other markers include the growing contribution from product categories adjacent to office supplies, and advances in digital and logistics capability.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
