ODP Corp. will hang on to its consumer business under common ownership

ODP Corp. said Tuesday that it will not sell its consumer business after all, and will instead hold on to it under common ownership with its other business units. ODP recently completed the transformation to a holding company structure with four business units: Office Depot LLC, which operates 1,000 Office Depot and OfficeMax retail locations and an e-commerce arm; ODP Business Solutions LLC; Veyer LLC, a supply chain, distribution, procurement and global sourcing business; and Varis LLC, a B2B digital platform technology business. Following a board review, ODP has canceled the divestiture of the consumer business, and has decided not to resume the potential public-company separation. Rather, it will keep all the businesses under common ownership due to current market conditions. “[T]he completion of our internal reorganization will make such a potential separation substantially simpler should the Company determine to resume the separation process following a change of market conditions in the future,” said Board Chair Joseph Vassalluzzo in a statement. For the second quarter, ODP expects consolidated revenue of about $2 billion and full-year results in line with last year. The FactSet consensus is for second-quarter revenue of $2.039 billion. For the full-year, the FactSet consensus is for revenue of $8.414 billion, down slightly from $8.465 billion in 2021. ODP stock slipped 1.8% in Tuesday premarket trading, and the stock is down 10.9% for the year to date. The broader S&P 500 index has slumped nearly 23%.

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