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SEGMENT INFORMATION | 6 Months Ended
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Jun. 28, 2025
Segment Reporting [Abstract] |
SEGMENT INFORMATION | NOTE 3. SEGMENT INFORMATION The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer. The CODM uses sales and operating income (which includes certain shared service cost allocations directly attributable to each of the segments) for each reportable segment. The CODM uses this information in the annual forecasting process, as well as on a periodic basis when evaluating actual segment performance against forecast, and making decisions about allocating operating and capital resources. The decisions to allocate resources include the Company’s pricing strategy, acquisitions, divestitures, investments in technology and other capital assets, and workforce levels, among others. At June 28, 2025, the Company had three reportable segments: ODP Business Solutions Division – The Company’s leading B2B distribution solutions provider serving small, medium, and enterprise level companies, including those in the public and education sectors. This segment operates in the United States, Puerto Rico, the U.S. Virgin Islands, and Canada. The ODP Business Solutions Division sells nationally branded, as well as the Company’s private branded, office supply and adjacency products and services to customers, who are served through a dedicated sales force, catalogs, telesales, and electronically through the Company’s Internet websites. Adjacency products and services include cleaning, janitorial and breakroom supplies, office furniture, technology products, and copy and print services. Starting in the first quarter of 2025, ODP Business Solutions Division expanded its hospitality supplies categories within its adjacency products. This segment also includes our Federation entities, which are over 20 regional office supply distribution businesses acquired by the Company as part of its transformation to expand its reach and distribution network into geographic areas that were previously underserved, and which continue to operate under their own brand names. The acquisition of these businesses has allowed for an effective and accretive means to expand our distribution reach, target new business customers, and grow our offerings beyond traditional office supplies. Office Depot Division – The Company’s leading provider of retail consumer and small business products and services distributed through a fully integrated omni-channel platform of 834 Office Depot and OfficeMax retail locations in the United States, Puerto Rico and the U.S. Virgin Islands, and an eCommerce presence (www.officedepot.com). The Office Depot Division sells office supplies, technology products and solutions, business machines and related supplies, cleaning, breakroom and facilities products, personal protective equipment, and office furniture as well as offering business services including copying, printing, digital imaging, mailing, shipping, and technology support services. In addition, the print needs of retail and business customers are facilitated through the Company’s regional print production centers. Veyer Division – The Company’s supply chain, distribution, procurement and global sourcing operation, which specializes in B2B and consumer business service delivery, with core competencies in distribution, fulfillment, transportation, global sourcing and purchasing. The Veyer Division’s customers include our Office Depot Division and ODP Business Solutions Division, as well as third-party customers. The Veyer Division also includes the Company’s global sourcing operations in Asia. Division operating income represents segment profit and is determined based on the measure of performance reported internally to manage the business and for resource allocation. This measure charges to the respective Divisions those expenses considered directly or closely related to their operations and allocates support costs. Certain operating expenses and credits are not allocated to the Divisions, including asset impairments and merger and restructuring expenses, net, as well as expenses and credits retained at the Corporate level, including certain management costs, legacy pension and environmental matters. Other companies may charge more or less of these items to their segments and results may not be comparable to similarly titled measures used by other companies. The following tables present sales and operating income by each of the segments, reconciled to consolidated sales and income (loss) from continuing operations before income taxes. The tables also include significant expenses of the segments:
(In millions) |  | ODP Business Solutions Division |  |  | Office Depot Division |  |  | Veyer Division |  |  | Total |
Second Quarter of 2025 |  |  |  |  |  |  |  |  |  |  |  |
Sales (external) |  | $ | 858 |  |  | $ | 709 |  |  | $ | 19 |  |  | $ | 1,586 |
Sales (internal) |  |  | 1 |  |  |  | 7 |  |  |  | 1,049 |  |  |  | 1,057 |
Total sales |  | $ | 859 |  |  | $ | 716 |  |  | $ | 1,068 |  |  | $ | 2,643 |
Reconciliation of revenue |  |  |  |  |  |  |  |  |  |  |  |
Elimination of intersegment revenues |  |  |  |  |  |  |  |  |  |  |  | (1,057 | )
Total consolidated revenues |  |  |  |  |  |  |  |  |  |  | $ | 1,586 |
Less: |  |  |  |  |  |  |  |  |  |  |  |
Cost of goods (and occupancy costs) |  |  | 745 |  |  |  | 544 |  |  |  | 1,044 |  |  |  |
Selling, general and administrative expenses |  |  | 96 |  |  |  | 160 |  |  |  | 14 |  |  |  |
Division operating income |  | $ | 18 |  |  | $ | 12 |  |  | $ | 10 |  |  | $ | 40 |
Reconciliation of segment profit (loss) |  |  |  |  |  |  |  |  |  |  |  |
Less unallocated amounts: |  |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative expenses |  |  |  |  |  |  |  |  |  |  |  | 15 |
Asset impairments |  |  |  |  |  |  |  |  |  |  |  | 3 |
Merger and restructuring expenses, net |  |  |  |  |  |  |  |  |  |  |  | 13 |
Other expense |  |  |  |  |  |  |  |  |  |  |  | 7 |
Income from continuing operations before income taxes |  |  |  |  |  |  |  |  |  |  | $ | 2 |
(In millions) |  | ODP Business Solutions Division |  |  | Office Depot Division |  |  | Veyer Division |  |  | Total |
First Half of 2025 |  |  |  |  |  |  |  |  |  |  |  |
Sales (external) |  | $ | 1,708 |  |  | $ | 1,541 |  |  | $ | 37 |  |  | $ | 3,286 |
Sales (internal) |  |  | 3 |  |  |  | 13 |  |  |  | 2,184 |  |  |  | 2,200 |
Total sales |  | $ | 1,711 |  |  | $ | 1,554 |  |  | $ | 2,221 |  |  | $ | 5,486 |
Reconciliation of revenue |  |  |  |  |  |  |  |  |  |  |  |
Elimination of intersegment revenues |  |  |  |  |  |  |  |  |  |  |  | (2,200 | )
Total consolidated revenues |  |  |  |  |  |  |  |  |  |  | $ | 3,286 |
Less: |  |  |  |  |  |  |  |  |  |  |  |
Cost of goods (and occupancy costs) |  |  | 1,479 |  |  |  | 1,164 |  |  |  | 2,172 |  |  |  |
Selling, general and administrative expenses |  |  | 192 |  |  |  | 334 |  |  |  | 30 |  |  |  |
Division operating income |  | $ | 40 |  |  | $ | 56 |  |  | $ | 19 |  |  | $ | 115 |
Reconciliation of segment profit (loss) |  |  |  |  |  |  |  |  |  |  |  |
Less unallocated amounts: |  |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative expenses |  |  |  |  |  |  |  |  |  |  |  | 36 |
Asset impairments |  |  |  |  |  |  |  |  |  |  |  | 41 |
Merger and restructuring expenses, net |  |  |  |  |  |  |  |  |  |  |  | 61 |
Other expense |  |  |  |  |  |  |  |  |  |  |  | 14 |
Loss from continuing operations before income taxes |  |  |  |  |  |  |  |  |  |  | $ | (37 | )
(In millions) |  | ODP Business Solutions Division |  |  | Office Depot Division |  |  | Veyer Division |  |  | Total |
Second Quarter of 2024 |  |  |  |  |  |  |  |  |  |  |  |
Sales (external) |  | $ | 915 |  |  | $ | 792 |  |  | $ | 10 |  |  | $ | 1,717 |
Sales (internal) |  |  | 2 |  |  |  | 7 |  |  |  | 1,167 |  |  |  | 1,176 |
Total sales |  | $ | 917 |  |  | $ | 799 |  |  | $ | 1,177 |  |  | $ | 2,893 |
Reconciliation of revenue |  |  |  |  |  |  |  |  |  |  |  |
Elimination of intersegment revenues |  |  |  |  |  |  |  |  |  |  |  | (1,176 | )
Total consolidated revenues |  |  |  |  |  |  |  |  |  |  | $ | 1,717 |
Less: |  |  |  |  |  |  |  |  |  |  |  |
Cost of goods (and occupancy costs) |  |  | 790 |  |  |  | 607 |  |  |  | 1,154 |  |  |  |
Selling, general and administrative expenses |  |  | 98 |  |  |  | 175 |  |  |  | 18 |  |  |  |
Division operating income |  | $ | 29 |  |  | $ | 17 |  |  | $ | 5 |  |  | $ | 51 |
Reconciliation of segment profit (loss) |  |  |  |  |  |  |  |  |  |  |  |
Less unallocated amounts: |  |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative expenses |  |  |  |  |  |  |  |  |  |  |  | 18 |
Asset impairments |  |  |  |  |  |  |  |  |  |  |  | 8 |
Merger and restructuring expenses, net |  |  |  |  |  |  |  |  |  |  |  | 25 |
Other expense |  |  |  |  |  |  |  |  |  |  |  | 4 |
Loss from continuing operations before income taxes |  |  |  |  |  |  |  |  |  |  | $ | (4 | )
(In millions) |  | ODP Business Solutions Division |  |  | Office Depot Division |  |  | Veyer Division |  |  | Total |
First Half of 2024 |  |  |  |  |  |  |  |  |  |  |  |
Sales (external) |  | $ | 1,838 |  |  | $ | 1,729 |  |  | $ | 19 |  |  | $ | 3,586 |
Sales (internal) |  |  | 5 |  |  |  | 15 |  |  |  | 2,401 |  |  |  | 2,421 |
Total sales |  | $ | 1,843 |  |  | $ | 1,744 |  |  | $ | 2,420 |  |  | $ | 6,007 |
Reconciliation of revenue |  |  |  |  |  |  |  |  |  |  |  |
Elimination of intersegment revenues |  |  |  |  |  |  |  |  |  |  |  | (2,421 | )
Total consolidated revenues |  |  |  |  |  |  |  |  |  |  | $ | 3,586 |
Less: |  |  |  |  |  |  |  |  |  |  |  |
Cost of goods (and occupancy costs) |  |  | 1,581 |  |  |  | 1,308 |  |  |  | 2,368 |  |  |  |
Selling, general and administrative expenses |  |  | 203 |  |  |  | 368 |  |  |  | 38 |  |  |  |
Division operating income |  | $ | 59 |  |  | $ | 68 |  |  | $ | 14 |  |  | $ | 141 |
Reconciliation of segment profit (loss) |  |  |  |  |  |  |  |  |  |  |  |
Less unallocated amounts: |  |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative expenses |  |  |  |  |  |  |  |  |  |  |  | 41 |
Asset impairments |  |  |  |  |  |  |  |  |  |  |  | 14 |
Merger and restructuring expenses, net |  |  |  |  |  |  |  |  |  |  |  | 45 |
Other expense |  |  |  |  |  |  |  |  |  |  |  | 6 |
Income from continuing operations before income taxes |  |  |  |  |  |  |  |  |  |  | $ | 35 |
The following table provides information about disaggregated sales by major categories:
|  | Second Quarter |  |  | First Half |
(In millions) |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Major sales categories |  |  |  |  |  |  |  |  |  |  |  |
Supplies |  | $ | 780 |  |  | $ | 846 |  |  | $ | 1,624 |  |  | $ | 1,775 |
Technology |  |  | 427 |  |  |  | 475 |  |  |  | 901 |  |  |  | 1,004 |
Furniture and other |  |  | 229 |  |  |  | 236 |  |  |  | 464 |  |  |  | 489 |
Copy and print |  |  | 150 |  |  |  | 160 |  |  |  | 297 |  |  |  | 318 |
Total |  | $ | 1,586 |  |  | $ | 1,717 |  |  | $ | 3,286 |  |  | $ | 3,586 |
The following table provides information about assets by each of the segments, reconciled to consolidated totals:
(In millions) |  | Balance as of June 28, 2025 |  |  | Balance as of December 28, 2024 |
ODP Business Solutions Division |  | $ | 723 |  |  | $ | 686 |
Office Depot Division |  |  | 1,128 |  |  |  | 1,197 |
Veyer Division |  |  | 1,005 |  |  |  | 1,101 |
Corporate |  |  | 545 |  |  |  | 545 |
Total |  | $ | 3,401 |  |  | $ | 3,529 |
The following table provides information about depreciation and amortization by each of the segments, reconciled to consolidated totals:
|  | Second Quarter |  |  | First Half |
(In millions) |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
ODP Business Solutions Division |  | $ | 5 |  |  | $ | 4 |  |  | $ | 10 |  |  | $ | 9 |
Office Depot Division |  |  | 9 |  |  |  | 10 |  |  |  | 19 |  |  |  | 21 |
Veyer Division |  |  | 9 |  |  |  | 9 |  |  |  | 18 |  |  |  | 17 |
Corporate |  |  | 6 |  |  |  | 1 |  |  |  | 9 |  |  |  | 2 |
Total |  | $ | 29 |  |  | $ | 24 |  |  | $ | 56 |  |  | $ | 49 |
The following table provides information about the components of goodwill by each of the segments, reconciled to consolidated totals:
(In millions) |  | Balance as of December 28, 2024 |  |  | Foreign Currency Rate Impact |  |  | Balance as of June 28, 2025 |
ODP Business Solutions Division |  | $ | 157 |  |  | $ | 1 |  |  | $ | 158 |
Office Depot Division |  |  | 219 |  |  |  | — |  |  |  | 219 |
Veyer Division |  |  | 35 |  |  |  | — |  |  |  | 35 |
Total |  | $ | 411 |  |  | $ | 1 |  |  | $ | 412 |
Goodwill and indefinite-lived intangible assets are tested for impairment annually as of the first day of fiscal December or more frequently when events or changes in circumstances indicate that impairment may have occurred. Each reportable segment also represents a reporting unit. The approval of the Optimize for Growth restructuring plan in the first quarter of 2025 has had a significant impact on the Company’s current and projected future results of operations, most notably for its Office Depot reporting unit where the retail store footprint will be significantly reduced by the end of 2028. The Company determined that an indicator of potential impairment existed for the Office Depot reporting unit and performed an interim quantitative goodwill impairment test in the first quarter of 2025. The quantitative test used the income approach valuation methodology and concluded that the fair value of the Office Depot reporting unit exceeds its carrying amount. There were no events or changes in circumstances that indicate an impairment may have occurred for any of the reporting units during the second quarter of 2025. The Company will continue to evaluate the recoverability of goodwill at the reporting unit level. If the operating results of the Company’s reporting units deteriorate in the future, it may cause the fair value of one or more of the reporting units to fall below their carrying value, resulting in goodwill impairment charges.

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