Office Depot Inc
Office Depot: Why the Stock Seems to Have Bottomed Out
Office Depot’s (ODP) fundamental performance has taken a toll on the company’s stock price.
Pricing Impact Of A Potential Staples-Office Depot Combination
Pricing pressures come from rival superstores as well as a variety of discount stores and online retailers. Therefore, a merger likely won’t result in higher prices for consumers.
Staples Reports Fiscal 3Q15 Results: Revenue and Income Falls
Staples (SPLS) has a market cap of $7.8 billion, and its YTD (year-to-date) price movement has been falling since June 2015.
Why Online Sales Are A Competitive Advantage For Staples
The growth in ODP and OMX’s combined sales fell—compared to Staples. They were ~143% of SPLS’s sales in 2007. This is just over $8 billion. That fell to $7.3 billion in 2013.
Office Supplies Retail: Regulation, Competition, And Consolidation
There aren’t many large brick-and-mortar players left in the market. The industry faced stiff competition from online retailers like Amazon (AMZN).
Most Analysts Recommend to “Hold” Staples’ Stock
Out of the 17 analysts covering Staples’ stock, 65% have given it “hold” recommendations, whereas the remaining 35% have given it “buy” recommendations.
Valuing Office Depot And Staples—Including Merger Synergies
The estimated cost synergies from a merger between SLPS and ODP would likely be $1.2–$1.5 billion after the companies’ integration is complete.
Change Is Needed In The Office Supplies Retail Segment
Although the office supplies industry is a niche retail segment, it’s highly fragmented. The industry has many players. The rivalry between the players is intense.
Deal Or No Deal: SPLS’s Ability to Finance ODP’s Purchase
Therefore, a possible acquisition by SPLS will likely be an all-stock deal. This was the case in the ODP-OfficeMax (OMX) merger of equals.
Mergers And Acquisitions In Retail—Are They Competitive?
A possible M&A (mergers and acquisitions) deal between Staples (SPLS) and Office Depot (ODP) has several positive factors. First, competition increased substantially since 1997.
Why Office Depot And OfficeMax Were A Merger Of Equals
Starboard’s interest in the office supplies industry is well known. Starboard disclosed a ~14.8% stake in Office Depot (ODP) in 2012. It has been pushing ODP to reduce its store size and cut costs.
LALT: A True Hedge ETF
The PowerShares Multi-Strategy Alternative Portfolio ETF (LALT) is one of those rare alternative ETFs that tries to replicate the performance of its index by active management of its assets.
Why Did Office Depot’s Sales Fall So Much in 4Q15?
In 4Q15, Office Depot’s (ODP) sales (VCR) fell 9%. Sales responded to the closure of 56 stores in North America, which had a negative impact of 4.0%.
Staples And Office Depot—Market Leaders In A Changing Industry
Staples (SPLS) and Office Depot (ODP) are facing a challenging business environment. Their core product category is office supplies. Revenues are declining for office supplies.
Office Depot’s Margin and Earnings for 1Q18
Office Depot’s (ODP) gross margin contracted ~160 bps (basis points) to 23.6% since the cost of goods sold increased more than 8%.
Basics of Office Depot
Office Depot is a global supplier of office products and services to businesses and consumers. The company has 64,000 employees.
A Look at the Details of Home Depot’s Digital Update
Home Depot has been following a strategy that leverages its brick-and-mortar store network and digital capabilities to create a seamless shopper experience.
Why Amazon’s Business Prime Service Matters
Amazon (AMZN) recently expanded its corporate-focused e-commerce offerings with the launch of its Amazon Prime version for businesses.
Office Depot Continues to Struggle, Stock down ~26% This Year
Year-to-date, Office Depot stock had fallen ~26% as of July 13, to $2.62.
Office Depot Stock Surged after 1Q18 Results
Office Depot (ODP) stock rose 6.5% on May 10 after the company reported its 1Q18 results on May 9.
Where Office Depot Stock Is Heading
As of May 3, Office Depot (ODP) stock had fallen 35.9% YTD (year-to-date).
What Analysts Recommend for Office Depot Stock
Of the eight analysts covering Office Depot (ODP) stock, 63% have rated it a “hold,” and 25% have rated it a “sell.”
Could Office Depot’s Margins Be under Pressure in 2018?
Office Depot’s (ODP) margins could stay under pressure as it diverts resources to transforming into a services-driven company.
Office Depot Sales Numbers: What Can We Expect Next?
For fiscal 2018, Office Depot management has projected a 5% decline in sales to $10.6 billion.
Office Depot Stock Has Shed 42% of Its Value in 2018
Office Depot (ODP) has been seeing a downtrend in its stock for some time. The stock has fallen 41.8% YTD as of April 10, 2018.
Office Depot’s Bottom Line Falls 27.3% in Fiscal 4Q17
Adjusted earnings fall 27.3% In fiscal 4Q17, Office Depot (ODP) had adjusted EPS (earnings per share) of $0.08, which came better than the analysts’ projection of $0.07 but fell 27.3% YoY (year-over-year). The company reported EPS from continuing operations of -$0.09 in fiscal 4Q17, compared with $0.10 in fiscal 4Q16. A net tax expense of $68 million related […]
A Look at Office Depot’s Fiscal 4Q17 Margins
Fiscal 4Q17 margin performance Between fiscal 4Q16 and 4Q17, Office Depot’s (ODP) gross margin contracted ~50 basis points to 23.5%. Its operating margin narrowed by 2.3% (20 basis points), primarily due to lower sales offset by lower SG&A (selling, general, and administrative) expenses. Its adjusted operating margin stayed at 3.7%. The company has been cutting costs and […]
Why Office Depot’s Fiscal 4Q17 Sales Disappointed
Quarterly revenue On February 28, 2018, Office Depot (ODP) reported its fiscal 4Q17[1.ended December 30, 2017] results. The company had sales of $2.58 billion, missing analysts’ estimate of $2.61 billion and marking a 5.3% fall YoY (year-over-year). Both its Retail and Business Solutions segments witnessed lower transaction volumes, dragging down their top line. On an adjusted basis (excluding the effects […]
Office Depot Stock Falls after Dismal Fiscal 4Q17 Results
Office Depot (ODP) announced its fiscal 4Q17 results on February 28, 2018. In this series, we’ll analyze the results in depth.
How Analysts View Office Depot before Its Upcoming Earnings
Ahead of Office Depot’s (ODP) upcoming 4Q17 results, most analysts covering the stock have maintained a “hold” rating.
Staples Was the S&P 500’s Top Gainer on June 28
Sycamore is expected to buy Staples for $6.9 billion—one of the biggest retail deals. Staples rose 8.4% and closed the day at $9.93.
Staples-Office Depot: Another Merger Bites the Dust
The Staples-Office Depot deal was always a long shot. The spread was always wide. The Obama administration is getting tougher on antitrust enforcement.
The Relationship between the Retail Industry and the US Economy
When we compare the S&P 500 (SPX) with the SPDR S&P Retail ETF (XRT), the retail ETF has beaten the broad market index on a trailing one-year basis.
Don’t trade the Office Depot spread like a typical arb spread
Once the proxy comes out, check the transaction background and see if they ran an auction. If not, a private equity buyer may step in after the deal breaks.
Handicapping the risk-reward balance of the Office Depot deal
Staples stock was up on the announcement, and the analyst community understands the pressure this segment is under. At any rate, no Staples vote is needed.
Parsing the Office Depot Material Adverse Change clause, part 1
Regarding the Office Depot and Staples deal, the MAC clause lays out the circumstances under which Staples can back out of its deal with Office Depot.
The Office Depot–Staples merger is about cost savings
Staples expects to spend $1 billion up front in order to achieve $1 billion in annual synergies—usually meaning reducing workforce—beginning in year three.
Understand the basics of the Staples–Office Depot merger
If another bidder tops the Staples bid, and Office Depot is unable to get shareholder approval, it will owe Staples a breakup fee of $185 million.
Valuing Office Depot—Comparing Buyout Transactions In Retail
PetSmart (PETM) is a specialty pet goods retailer. On December 14, PETM announced its leveraged buyout, or LBO, by an investor group. The investor group is led by BC Partners.
Online Sales Channels—Staples And Office Depot
During the last fiscal year—ending on February 1, 2014—almost half of SPLS’s sales came from its online sales channel. Its online sales were nearly flat from 2011 to 2013.
Starboard’s Track Record As An Activist Investor
Starboard was founded in 2002. It’s based in New York. Starboard’s strategy uses fundamental investing principles to identify deeply-undervalued, publicly-listed US corporations.
Why Is Starboard Interested In Staples And Office Depot?
Recent company filings revealed that Starboard owned significant stakes in the first and second players in the office supplies market—Staples (SPLS) and Office Depot (ODP).
Bricks and mortar retailers may push back against Google Express
Google Express helps retailers grow business. But it also enables customers to avoid the need to visit stores, which reduces impulse purchases.