HP Inc. (HPQ) Reveals Disappointing Total Supplies Revenue

On June 21, 2016, HP announced a one-time investment of $450 million to buy back supplies from its channel partners to better align supplies inventory levels with demand. Consequently, HP adopted a new approach centered on a "four-box model," assuring investors it would improve managing and aligning to demand and avert the problems that necessitated the $450 million buy-back. Then, on February 27, 2019, HP reported disappointing total supplies revenue for first quarter 2019, revealing that its four-box model lacked telemetry data to make reliable market share assumptions. Finally, on October 3, 2019, HP announced that it was moving away from using the four-box model to a model that de-emphasized supplies revenue and would be cutting up to 16% of its global workforce as part of the restructuring. On this news, HP's stock price fell nearly 10% to close at $16.64 per share.