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Factors to Know Ahead of Office Depot's (ODP) Q1 Earnings
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Office Depot, Inc. (ODP - Free Report) is likely to register a decline in the top line when it reports first-quarter 2020 numbers on May 6, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $2,647 million, indicating a decline of about 4.4% from the prior-year reported figure.
However, the bottom line is expected to increase year over year. We note that the Zacks Consensus Estimate for earnings for the quarter under review has been stable over the past 30 days at 8 cents. The figure suggests growth of 14.3% from the prior-year quarter.
Notably, this provider of business services and supplies, products and technology solutions has a trailing four-quarter positive earnings surprise of 24.3%, on average. In the last reported quarter, the company reported positive earnings surprise of 33.3%.
Key Factors to Note
Office Depot has been focusing on business operating model, viable projects and cost structure, and making incremental investments to increase the revenue contribution from services. It has been concentrating on product assortment mix and exploring store-within-a-store opportunities. Also, it has been increasing penetration into adjacent categories. Adjacency categories account for 37% of overall Business Solutions Division sales in the last reported quarter. Moreover, the company has been making every effort to enhance e-commerce platforms and is well equipped to serve customers be it curbside pickup or delivery at home.
In spite of these tailwinds, softness across CompuCom and Retail divisions remains a concern. We note that the company’s Retail division has been witnessing dismal comparable-store sales for a while now. Persistence of such performance across both these divisions is likely to get reflected in the company’s first-quarter results.
Nonetheless, the company’s bottom line is likely to have benefited from Business Acceleration Program that involves reducing costs, improving operational efficiencies, enhancing service delivery, effective use of technology and automation and identifying strategic investment opportunities.
Office Depot, Inc. Price, Consensus and EPS Surprise
Our proven model doesn’t conclusively predict an earnings beat for Office Depot this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Although Office Depot carries a Zacks Rank #3, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With Favorable Combination
Here are companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Walmart (WMT - Free Report) has an Earnings ESP of +2.38% and a Zacks Rank #3.
Casey's General Stores (CASY - Free Report) has an Earnings ESP of +28.01% and a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Factors to Know Ahead of Office Depot's (ODP) Q1 Earnings
Office Depot, Inc. (ODP - Free Report) is likely to register a decline in the top line when it reports first-quarter 2020 numbers on May 6, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $2,647 million, indicating a decline of about 4.4% from the prior-year reported figure.
However, the bottom line is expected to increase year over year. We note that the Zacks Consensus Estimate for earnings for the quarter under review has been stable over the past 30 days at 8 cents. The figure suggests growth of 14.3% from the prior-year quarter.
Notably, this provider of business services and supplies, products and technology solutions has a trailing four-quarter positive earnings surprise of 24.3%, on average. In the last reported quarter, the company reported positive earnings surprise of 33.3%.
Key Factors to Note
Office Depot has been focusing on business operating model, viable projects and cost structure, and making incremental investments to increase the revenue contribution from services. It has been concentrating on product assortment mix and exploring store-within-a-store opportunities. Also, it has been increasing penetration into adjacent categories. Adjacency categories account for 37% of overall Business Solutions Division sales in the last reported quarter. Moreover, the company has been making every effort to enhance e-commerce platforms and is well equipped to serve customers be it curbside pickup or delivery at home.
In spite of these tailwinds, softness across CompuCom and Retail divisions remains a concern. We note that the company’s Retail division has been witnessing dismal comparable-store sales for a while now. Persistence of such performance across both these divisions is likely to get reflected in the company’s first-quarter results.
Nonetheless, the company’s bottom line is likely to have benefited from Business Acceleration Program that involves reducing costs, improving operational efficiencies, enhancing service delivery, effective use of technology and automation and identifying strategic investment opportunities.
Office Depot, Inc. Price, Consensus and EPS Surprise
Office Depot, Inc. price-consensus-eps-surprise-chart | Office Depot, Inc. Quote
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Office Depot this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Although Office Depot carries a Zacks Rank #3, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With Favorable Combination
Here are companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Dollar General (DG - Free Report) has an Earnings ESP of +4.03% and a Zacks Rank of #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Walmart (WMT - Free Report) has an Earnings ESP of +2.38% and a Zacks Rank #3.
Casey's General Stores (CASY - Free Report) has an Earnings ESP of +28.01% and a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>