The ODP (ODP) UBS Global Consumer and Retail Conference 2025 summary

Strategic challenges and opportunities

• Facing headwinds in both retail and traditional office supply markets, with long-term declines and recent acceleration in 2024.

• Investments in supply chain technology and software have positioned the business for new growth opportunities.

• Recent wins in hospitality and B2B adjacencies, including a $150 million annual contract and a partnership with CoreTrust, are expected to drive future growth.

• The hospitality market entry is seen as a major inflection point, with a $16 billion market growing at 4-6% CAGR and limited competition due to high entry barriers.

• Diversification of supply chain sourcing has reduced exposure to tariffs, with inventory now sourced from multiple countries.

Execution and operational focus

• The Optimized for Growth plan targets cost reduction and EBITDA improvement, with a focus on managing retail stores for cash flow and margin.

• Store closures and supply chain restructuring are underway to further reduce fixed costs and improve profitability.

• Flexibility in lease management allows for rapid adaptation to market conditions, with short-term renewals for profitable stores.

• The company is leveraging its supply chain to support new business wins, including next-day delivery to 98.5% of U.S. ZIP codes.

• Strong balance sheet and cash flow management provide a competitive advantage and support ongoing investments.

Growth vectors and market expansion

• Three main growth levers: core business stabilization, expansion of Veyer (3PL and supply chain services), and hospitality market entry.

• The hospitality segment offers high-margin, low-leakage opportunities due to curated product requirements and franchise standards.

• Early success in hospitality is generating inbound interest from other industry players.

• Veyer’s 3PL capabilities, now fully operational, enable the company to monetize excess distribution capacity and attract new clients.

• New business wins in apparel, cosmetics, and other sectors are expected to drive fixed cost absorption and EBITDA growth.