Office Depot (ODP) To Report Q3 Earnings: Is A Beat In Store?
Zacks Investment Research | Nov 04, 2018 09:32PM ET
Office Depot, Inc. (NASDAQ:ODP) is scheduled to release third-quarter 2018 results on Nov 7. In the last reported quarter, the company reported an earnings beat of 25%. Further, this Florida-based company has an impressive earnings surprise history, with average beat of 9.8%.
How are Estimates Faring?
The Zacks Consensus Estimate for the quarter under review is 12 cents, reflecting a decline of 14.3% from the year-ago quarter. We note that the Zacks Consensus Estimate has gone down by a penny in the past 30 days. The Zacks Consensus Estimate for revenues is $2,858 million, up 9.1% from $2,620 million recorded in the year-ago period.
Let’s see how things are shaping up prior to this announcement.
Factors to Consider
Office Depot is exposed to headwinds stemming from soft demand for office products due to technological advancements. Smartphones, tablets and laptops are fast emerging as viable substitutes for paper-based office supplies. Moreover, higher marketing, advertising and other growth-related investments may hurt margins.
Further, rise in cost of goods sold and occupancy costs as well as increased SG&A and interest expenses have been a threat to the company’s bottom line for a while now. We note that earnings per share had declined 50% and 17% in the first and second quarter of 2018, respectively. Also, dismal comparable-store sales run across the company’s Retail division for the past few quarters and stiff competition from office supply retailers are concerns.
Such downsides led the stock to plunge 10.1% in the past month, against the Zacks Investment Research
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