Office Depot’s stock surges after profit beat, review of holding company reorganization announced

Shares of Office Depot Inc. shot up 7.8% toward a 6-month high in premarket trading Wednesday, after the office-supply retailer beat profit expectations, said it was reviewing implementing a holding company reorganization and increased its stock repurchase program. Net income was $60 million, or 11 cents a share, unchanged from a year ago. Excluding non-recurring items, adjusted EPS rose to 15 cents from 13 cents, above the FactSet consensus of 13 cents. Sales fell 4% to $2.78 billion, below the FactSet consensus of $2.83 billion. The company affirmed its 2019 sales guidance range of $10.8 billion to $10.9 billion, compared with the FactSet consensus of $10.8 billion. The company said if a reorganization is implemented, a new holding company would be created, named ODP Corp., that will become the new parent of Office Depot. The stock would still trade on the Nasdaq under the ticker symbol “ODP.” The stock has tumbled 15.1% year to date through Tuesday, while the S&P 500 has rallied 22.7%.

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