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Analyst Blog

On Jul 30, Zacks Investment Research upgraded leading office product retailer, Staples, Inc. (SPLS - Analyst Report), to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Being a leading retailer of office products and services, we believe Staples remains well positioned to benefit from the sector consolidation that would help it capture incremental market share through rational pricing. The company is poised to generate growth by enhancing its online features, expanding offerings and streamlining its cost structure.

Staples is laying emphasis on improving store productivity, accelerating growth in adjacent categories and increasing market share in core office supplies. Alongside, the company is focusing on the delivery business, which requires less capital and generates higher margins.

The company also launched its first omnichannel stores – what it refers to as the future of retail. Simply put, through this omnichannel strategy, Staples hopes to fuse its retail network with enhanced digital capabilities. The company stated that it’s Norwood, Mass, and Dover, Del., stores will incorporate its .com and mobile assets. Alongside, the stores will feature Staples.com kiosks. 

This new era store concept, with all its attractions could well prove to be a game changer in the long run for Staples. Providing shoppers the ease of shopping on their own terms and enriching their in-store shopping experience could be a crucial point of differentiation among other retailers.

Other Stocks to Consider

Beside Staples, other stocks in the Retail-Wholesale industry worth considering include Brown Shoe Co. Inc. (BWS - Snapshot Report), Wolverine World Wide Inc. (WWW - Snapshot Report) and ITOCHU Corporation (ITOCY), all of which carry a favorable Zacks Rank #1 (Strong Buy).

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