The ODP Corporation, the parent company of Office Depot and OfficeMax, reported its 2022 fourth-quarter and full-year results on March 1, showing that sales mostly held steady for the retailer compared to 2021. In addition to Office Depot and OfficeMax, ODP’s portfolio of brands includes Grand & Toy, Ativa, TUL, Foray, Realspace and DiVoga, as well as ODP Business Solutions — which operates as a B2B distributor — and Varis, ODP’s recently-launched digital marketplace.
In 4Q 2022, ODP posted total sales of $2.1 billion, up 3% year-over-year. The increase in sales was driven by higher sales in ODP’s B2B distribution division, ODP Business Solutions, which offset lower sales in its consumer division, Office Depot, according to the report. Office Depot sales were lower due to operating 58 fewer stores than in 2021 as a result of planned store closures and lower traffic.
ODP had 4Q operating income of $55 million, net income from continuing operations of $36 million, operating cash flow from continuing operations of $158 million, and free cash flow of $127 million, all up significantly year-over-year.
ODP reported 4Q sales for each of the following business divisions:
- ODP Business Solutions had 4Q sales of $1 billion, up 10% year-over-year, due to more customers returning to the workplace, which helped drive strong sales in core and adjacency products.
- Office Depot had 4Q sales of $1.1 billion, down 3% year-over-year, due to store closures and lower demand in certain product categories.
- Veyer — ODP’s new procurement and global sourcing operation, which procures and distributes products for other divisions and third-party customers — had 4Q sales of $1.5 billion, mostly supporting the ODP Business Solutions and Office Depot divisions.
- Varis had 4Q revenues of $2 million and an operating loss of $18 million due to incurred costs of launching the program during 4Q.
For the full year 2022, ODP reported sales of $8.5 billion, which is flat compared to 2021. ODP had operating income of $243 million, net income from continuing operations of $178 million, and operating cash flow from continuing operations of $237 million.
“Our performance in the quarter reflected our continued disciplined financial and operational focus during a challenging macroeconomic environment, which is a testament to the commitment of our team across each of our businesses,” ODP CEO Gerry Smith said in the report. “We navigated a very complicated year, delivering solid performance with full year results consistent with our guidance, despite the ongoing macroeconomic environment burdened by high inflation and slower GDP growth.
“We remain excited about our re-aligned four business unit structure, unlocking the potential of our business and providing greater transparency and more opportunities for long-term growth. We’re encouraged about the progress we are making at Veyer, our supply chain and logistics division, as it begins to build its pipeline of new business, and at Varis, as it continues to refine its capabilities and adds new customers and suppliers to its recently launched B2B digital platform.”