Shares of The ODP Company (NASDAQ: ODP) have been up 7% on Wednesday. The inventory has gained 55% because the starting of the yr and 113% previously 12 months. The corporate reported blended outcomes for the primary quarter of 2021, with earnings surpassing expectations whereas income fell quick. ODP additionally introduced that it was splitting into two impartial, public corporations.
Whole gross sales for Q1 2021 fell 13% year-over-year to $2.four billion and was shy of analysts’ projections. Adjusted EPS of $1.21 remained unchanged from final yr however surpassed expectations. Gross sales throughout the quarter have been damage by fewer variety of retail shops being in service in addition to a discount in gross sales attributable to the results of the COVID-19 pandemic. Each product and repair revenues witnessed double digit declines throughout the quarter.
ODP recorded double-digit gross sales declines throughout all its enterprise divisions primarily because of retailer closures and different results associated to the pandemic. Although retailer gross sales suffered, different channels picked up tempo throughout the quarter. Throughout the Enterprise Options Division, the pandemic impacted operations driving gross sales 16% decrease versus the prior yr however demand in ecommerce climbed 3%.
Gross sales within the Retail Division fell 10% as the corporate closed a number of underperforming shops and thereby had fewer shops on the finish of Q1. On the identical time, ODP noticed a 35% progress in its purchase on-line, decide up in retailer (BOPIS) providing. The CompuCom Division noticed gross sales fall 17% because the pandemic led to decrease service volumes and the malware incident led to decrease billed service revenues.
Through the quarter, ODP made progress on its digital transformation initiatives. The corporate built-in the P2P eProcurement software program platform BuyerQuest into its new know-how platform enterprise thereby increasing its buyer base and its pipeline of alternatives. Capex decreased to $13 million within the quarter in comparison with final yr as the corporate lowered its investments in retail operations whereas focusing extra on its digital transformation, ecommerce capabilities and distribution community.
ODP introduced that it’s spinning off its Enterprise-to-Enterprise (B2B) division into an impartial firm. It would distribute the shares of the brand new firm as a tax-free dividend to ODP’s shareholders who will personal 100% of the fairness in each the impartial, public corporations. The spin-off is anticipated to be accomplished throughout the first half of 2022. This transfer is anticipated to assist each corporations pursue their very own methods with their particular set of funding alternatives and progress aims.