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Office Depot Takes Lead, Stays Ahead of Industry in 6 Months
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Shares of Office Depot, Inc. (ODP - Free Report) have surged roughly 46% in the past six months. This Zacks Rank #2 (Buy) stock has not only fared better than the industry that increased 21% but also the Zacks Retail & Wholesale Sector that advanced about 8%. The company’s business operating model, growth prospects and omni-channel capabilities have definitely acted as propellants.
The company is trying all means to give itself a complete makeover in an environment where demand for office products (paper-based) has shrunk due to technological advancements. Strategic endeavors, including strengthening of core businesses and expansion of service and subscription offerings have been fueling top-line growth.
Let’s Introspect
Office Depot is also closing underperforming stores, reducing exposure to higher dollar-value inventory items, shuttering non-critical distribution facilities, concentrating on e-commerce platforms as well as focusing on providing innovative products and services. The company by increasing penetration into adjacent categories and enhancing share of wallet with existing customers, intends to boost sales in the contract channel. The company is also engaging in the acquisition of small, independent regional office product dealers in different geographical locations such as Hawaii, Wisconsin, Oklahoma and New Mexico to enhance its footprint.
Management is making incremental investments to catapult it into a product and services-driven enterprise. Service revenue now represents approximately 14% of the total sales and is likely to reach about 20% of total sales in the next two years. To widen its domain of offerings, Office Depot acquired CompuCom Systems that is helping it to acclimatize to the fast-changing retail landscape along with providing enterprise-level tech services and products to customers. The company also signed a channel partner agreement with MicroCorp, a premier value-added distributor of telecom and cloud solutions.
The company is also incorporating Tech-Zone services desk across its stores. It also launched a subscription-based business services platform, BizBox, to assist start-ups and small businesses on host of things such as website designing, financing and accounting service, HR/payroll support and others. We believe that improvement in Business Solutions and CompuCom divisions is likely to benefit the company going forward.
With respect to the cost containment efforts, the company is employing a more efficient customer coverage model, focusing on lowering indirect procurement costs as well as general and administrative expenditures. Office Depot is also gaining from its U.S. retail store optimization plan.
Wrapping Up
Office Depot is leaving no stone unturned to develop into an omni-channel business services platform, offering end-to-end solutions to enterprise customers and small to medium-sized businesses.
Target (TGT - Free Report) delivered an average positive earnings surprise of 1.3% in the trailing four quarters. It carries a Zacks Rank #2.
Burlington Stores (BURL - Free Report) delivered an average positive earnings surprise of 11.4% in the trailing four quarters. It has a long-term earnings growth rate of 20.2% and a Zacks Rank #2.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Office Depot Takes Lead, Stays Ahead of Industry in 6 Months
Shares of Office Depot, Inc. (ODP - Free Report) have surged roughly 46% in the past six months. This Zacks Rank #2 (Buy) stock has not only fared better than the industry that increased 21% but also the Zacks Retail & Wholesale Sector that advanced about 8%. The company’s business operating model, growth prospects and omni-channel capabilities have definitely acted as propellants.
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The company is trying all means to give itself a complete makeover in an environment where demand for office products (paper-based) has shrunk due to technological advancements. Strategic endeavors, including strengthening of core businesses and expansion of service and subscription offerings have been fueling top-line growth.
Let’s Introspect
Office Depot is also closing underperforming stores, reducing exposure to higher dollar-value inventory items, shuttering non-critical distribution facilities, concentrating on e-commerce platforms as well as focusing on providing innovative products and services. The company by increasing penetration into adjacent categories and enhancing share of wallet with existing customers, intends to boost sales in the contract channel. The company is also engaging in the acquisition of small, independent regional office product dealers in different geographical locations such as Hawaii, Wisconsin, Oklahoma and New Mexico to enhance its footprint.
Management is making incremental investments to catapult it into a product and services-driven enterprise. Service revenue now represents approximately 14% of the total sales and is likely to reach about 20% of total sales in the next two years. To widen its domain of offerings, Office Depot acquired CompuCom Systems that is helping it to acclimatize to the fast-changing retail landscape along with providing enterprise-level tech services and products to customers. The company also signed a channel partner agreement with MicroCorp, a premier value-added distributor of telecom and cloud solutions.
The company is also incorporating Tech-Zone services desk across its stores. It also launched a subscription-based business services platform, BizBox, to assist start-ups and small businesses on host of things such as website designing, financing and accounting service, HR/payroll support and others. We believe that improvement in Business Solutions and CompuCom divisions is likely to benefit the company going forward.
With respect to the cost containment efforts, the company is employing a more efficient customer coverage model, focusing on lowering indirect procurement costs as well as general and administrative expenditures. Office Depot is also gaining from its U.S. retail store optimization plan.
Wrapping Up
Office Depot is leaving no stone unturned to develop into an omni-channel business services platform, offering end-to-end solutions to enterprise customers and small to medium-sized businesses.
3 More Stocks You Can’t Miss
Urban Outfitters (URBN - Free Report) delivered an average positive earnings surprise of 17.7% in the trailing four quarters. It has a long-term earnings growth rate of 12% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Target (TGT - Free Report) delivered an average positive earnings surprise of 1.3% in the trailing four quarters. It carries a Zacks Rank #2.
Burlington Stores (BURL - Free Report) delivered an average positive earnings surprise of 11.4% in the trailing four quarters. It has a long-term earnings growth rate of 20.2% and a Zacks Rank #2.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>