The ODP Corporation (ODP): BCG Matrix [Dec-2025 Updated]

You're looking at The ODP Corporation's current state, and frankly, it's a classic strategic pivot: milking the reliable cash cows while betting big on high-risk, high-reward growth plays. We've mapped their key segments-from the shrinking Office Depot retail footprint seeing a 13% sales drop to the burgeoning Veyer logistics business soaring 64% year-over-year-onto the Boston Consulting Group Matrix. This analysis cuts through the noise to show you exactly where the $89 million in adjusted free cash flow is coming from and which new ventures need immediate capital to avoid becoming Dogs. See below for the clear-eyed breakdown of where The ODP Corporation is investing for tomorrow, focusing on managing decline in the old core while aggressively funding new, smaller ventures.

Background of The ODP Corporation (ODP)

You're looking at The ODP Corporation (ODP) right as it's wrapping up a major strategic shift, which you'll definitely want to factor into any portfolio analysis. As of the third quarter of 2025, The ODP Corporation reported total consolidated revenue of $1.6 billion, marking a 9% decrease versus the same period last year. Honestly, the top-line pressure is clear, with year-to-date sales sitting at $4.911 billion.

The company operates across four realigned business units: ODP Business Solutions, Office Depot, Veyer, and Varis. The performance across these segments tells a mixed story, which is exactly why we use frameworks like the BCG Matrix. For instance, the Office Depot Division, which handles retail consumer and small business products, saw its reported sales drop to $749 million in Q3 2025, down 13% year-over-year.

This retail segment is shrinking its physical footprint; ODP was operating with 63 fewer retail locations compared to the prior year. Still, the remaining stores showed some operational discipline, as the operating income for the Office Depot Division was $31 million, representing 4% of its sales, which was an improvement of 140 basis points year-over-year. On a comparable store basis, sales were down 7%.

Now, look at the B2B side, the ODP Business Solutions Division. This segment brought in $862 million in Q3 2025 sales, a more moderate decline of 6% year-over-year. What's interesting here is the category mix: sales in adjacency categories-think cleaning, breakroom, furniture, technology, and copy/print-made up 45% of this division's total sales.

Then you have Veyer, which is their supply chain and logistics play. This unit is showing some real traction in diversification. Sales generated from third-party customers hit $23 million in the quarter, a huge jump of 64% compared to Q3 2024, and it generated $7 million in EBITDA from those external customers. This B2B logistics growth is a key part of their strategy to pivot away from the declining retail base.

Overall, The ODP Corporation managed to post an adjusted Earnings Per Share (EPS) of $1.14 for the quarter, beating consensus estimates. They also generated $89 million in Adjusted Free Cash Flow, which is solid cash generation despite the revenue headwinds. To be defintely clear on the near-term context, management did not provide forward guidance because the company is in the final stages of its previously announced merger with Atlas Holdings, which they expect to close by the end of 2025.

The ODP Corporation (ODP) - BCG Matrix: Stars

You're looking at the areas of The ODP Corporation (ODP) that are capturing significant market momentum, demanding investment to maintain that lead. These are the units with high market share in markets that are still expanding rapidly.

The Veyer third-party logistics business is definitely showing Star characteristics based on its recent performance. Its external revenue, which is sales to customers outside the core ODP structure, grew by an impressive 64% year-over-year to reach $23 million in the third quarter of 2025. That kind of growth in the third-party logistics (3PL) space signals strong market capture.

The company's strategic direction, encapsulated in the 'Optimize for Growth' plan, clearly signals where capital is flowing to nurture these Stars. Investment is being deliberately shifted toward supply chain and digital capabilities to support this B2B acceleration.

Here's a quick look at the key performance indicators supporting the Star categorization for these high-potential areas:

The ODP Business Solutions Division is seeing its high-growth adjacency categories-which include cleaning, breakroom, furniture, technology, and copy and print-contribute substantially. These categories now account for 45% of the division's total sales, showing a strong foothold in non-traditional office supply areas. This is a direct result of strategic B2B expansion into new enterprise verticals like hospitality and healthcare.

The capital allocation reflects this focus on growth over immediate cash generation, which is typical for Stars. For instance, capital expenditures in the third quarter of 2025 were $12 million, a notable decrease from $22 million in the third quarter of the prior year, but this reduction is because investments are being prioritized specifically toward B2B growth opportunities supporting supply chain operations, the distribution network, and digital capabilities.

The push into new enterprise verticals is concrete:

• Onboarding over 600 new hotel properties under the hospitality agreement in Q3 2025.
• Continued expansion focus into the healthcare vertical.
• Capital expenditures in Q3 2025 were $12 million, down from $22 million in Q3 2024, showing a shift in investment focus.
• The 'Optimize for Growth' plan is designed to generate over $1.3 billion in total value over its multi-year life.

If this high growth in Veyer and the penetration in adjacency categories can be sustained as the overall market matures, these units are positioned to transition into Cash Cows for The ODP Corporation down the line. Finance: draft 13-week cash view by Friday.

The ODP Corporation (ODP) - BCG Matrix: Cash Cows

You're looking at the established, high-market-share businesses that are funding the rest of The ODP Corporation's strategy. These are the units that generate more cash than they consume, even when the top line is shrinking. For The ODP Corporation, the retail footprint, while contracting, is definitely playing this role right now.

Here's a look at the core financial outputs from the third quarter of 2025 that define this cash-generating engine:

The Office Depot retail division is the classic example of a cash cow here. It's in a mature, low-growth space, and the company is actively managing its footprint down-closing 63 retail locations compared to the prior year, ending Q3 2025 with 822 stores. Still, this division managed to pull in $31 million in operating income on $749 million in sales, translating to a 4% operating margin. That's cash being extracted without heavy reinvestment into expansion.

This focus on efficiency and cash capture is evident in the overall financial health, even with top-line pressure. The company generated $90 million in operating cash flow, leading to that key $89 million in adjusted free cash flow for the quarter. This cash flow is the lifeblood for funding other strategic areas, which is exactly what a cash cow is supposed to do.

The structure shows a clear mandate: milk the established base to fund the growth areas. You can see the scale difference:

• ODP Business Solutions (B2B) reported sales of $862 million in Q3 2025, representing the stable, large base.
• The Office Depot Division reported sales of $749 million, which saw a 13% year-over-year decline.
• The B2B segment sales declined 6% year-over-year, showing macroeconomic headwinds affecting both, but the retail segment is being actively streamlined.

The goal is to maintain the productivity of the Office Depot retail infrastructure-keeping promotion and placement investments targeted, not expansive-to ensure that $31 million operating income keeps flowing. This cash is then directed to support the infrastructure and growth initiatives within the ODP Business Solutions segment, which is where The ODP Corporation is focusing its investment energy.

The ODP Corporation (ODP) - BCG Matrix: Dogs

You're looking at the pieces of The ODP Corporation (ODP) portfolio that aren't generating excitement or significant cash flow. These are the Dogs-units operating in low-growth areas with minimal market traction. Honestly, the strategy here is usually to minimize exposure and avoid sinking good money after bad.

The shrinking Office Depot retail store footprint is a prime example of this quadrant's reality. As of the third quarter of 2025, The ODP Corporation reported having 63 fewer retail locations compared to the same period last year, reflecting the ongoing closure strategy. This reduction in physical presence is a direct response to the low-growth market dynamics facing the traditional segment. During Q3 2025 alone, the company closed 12 retail stores, ending the quarter with 822 locations, down from 885 at the end of Q3 2024.

The Varis digital procurement platform, launched in 2021, is effectively a Dog that management has chosen to exit, signaling a failed internal venture despite its potential. The ODP Corporation finalized the sale of the Varis Division in October 2024, retaining a minority stake of 19.9% in the entity. To be fair, the company is still on the hook for up to $4 million in Varis expenses until December 31, 2025, but the core capital commitment is concluded. This move aligns with the need to stop funding ventures that haven't achieved the necessary market share.

The core retail segment, Office Depot, clearly demonstrates the low-growth, low-share profile. Lower retail and online consumer traffic year-over-year directly impacted this division's top line. Here's the quick math on the Office Depot Division's Q3 2025 performance:

The traditional office supply product categories face a secular decline, and this pressure isn't limited to the consumer-facing side. Macroeconomic headwinds and softer enterprise customer spending are also weighing on the B2B side. The ODP Business Solutions Division, which serves enterprise clients, still saw its sales decline by 6% year-over-year in Q3 2025, with reported sales of $862 million. This indicates that even the B2B segment is struggling with market saturation and shifting purchasing patterns for traditional goods, which is a hallmark of a low-growth market for these products.

Overall consolidated revenue for The ODP Corporation in Q3 2025 was $1.6 billion, a 9% decrease from $1.78 billion in Q3 2024. The performance of these Dog units, particularly the retail footprint, is a major drag on overall growth, tying up capital that could be allocated to Stars or Question Marks with higher potential. Finance: draft 13-week cash view by Friday.

The ODP Corporation (ODP) - BCG Matrix: Question Marks

You're looking at the new, high-potential ventures within The ODP Corporation (ODP) that are consuming cash while they fight for market share. These are the Question Marks, and in Q3 2025, the Veyer division's external growth story is the clearest example.

The initial external growth of Veyer, which is high-growth but still a small fraction of the total $1.625 billion Q3 2025 consolidated sales, shows this dynamic perfectly. Veyer's sales generated from third-party customers hit $23 million in the quarter, representing a strong year-over-year increase of 64%. That growth rate is definitely Star-like, but the absolute dollar amount is a small piece of the overall revenue pie.

Here's a quick look at how Veyer's external traction stacks up against the larger division:

New B2B customer acquisition in the hospitality sector is another area fitting this quadrant. The company onboarded over 600 new hotel properties in Q3 2025 under its hospitality agreement. This is significant traction, especially since adjacency categories like Operating, Supplies & Equipment (OS&E) within hospitality saw accelerated sales growth. Still, the long-term revenue scale from these new contracts is unproven; it's a bet that these new relationships will translate into sustained, high-volume orders, moving them out of the Question Mark zone.

The overall ODP Business Solutions division, where these growth initiatives reside, saw a 6% sales decline in Q3 2025. This decline, attributed to macroeconomic headwinds and softer enterprise spending, shows that the new growth isn't yet offsetting core market contraction. To be fair, the focus on adjacency categories-cleaning, breakroom, furniture, technology, and copy and print-was a bright spot, making up 45% of the total ODP Business Solutions' sales.

The success of the 'Optimize for Growth' restructuring plan is a major investment aimed at accelerating B2B revenue. The plan maintains its multi-year expectation of an EBITDA improvement of approximately $380 million and a total expected value of >$1.3 billion. This massive investment is the cash burn required to turn these Question Marks into Stars. If the hospitality onboarding and Veyer's external momentum can accelerate quickly, the investment thesis holds. If not, these high-potential areas risk becoming Dogs as the core market continues to contract.

You need to watch the conversion rate from new hotel onboarding to consistent revenue flow. Finance: draft the Q4 2025 cash flow projection incorporating the Veyer growth rate against the ongoing restructuring spend by next Tuesday.