ODP Corp's Q1 Revenue Outperforms Expectations Despite Sales Decline: 'We Remain Cautiously Optimistic'

• The ODP Corp ODP reported a first-quarter FY23 sales decline of 3.2% year-on-year to $2.108 billion, beating the consensus of $2.100 billion.
• The business services provider registered an adjusted EPS of $1.78, beating the analyst consensus of $1.34.
• The year-over-year revenue decline was due to lower sales in its Office Depot consumer division and lower traffic. However, strength in ODP Business Solutions and strong sales of core supplies, furniture, and technology products resulted in street-beating performance. 
• ODP Business Solutions Division reported sales of $1.0 billion, up 3% Y/Y. Office Depot Division reported sales of $1.1 billion, down 8% Y/Y.
• The company reported operating income of $95 million in Q1, up 25% Y/Y.
• At quarter end, the company had $1.1 billion of total available liquidity, including $343 million in cash and equivalents.
• "Moving ahead, we remain cautiously optimistic as we continue to navigate the challenging macroeconomic environment and its related negative impact on consumer activity," CEO Gerry Smith said.
• FY23 Outlook: The company reiterated its outlook. ODP expects FY23 sales of $8 billion - $8.4 billion (consensus $8.15 billion) and adjusted EPS of $4.50 - $5.10 (consensus $4.75).
• Price Action: ODP shares are trading higher by 3.46% at $43.41 on last check Wednesday.

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