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Staples, Inc.

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Staples has significantly outperformed the Zacks categorized industry in the last three months thanks to its strategic plans to boost long-term value. We believe the company’s actions to streamline operations aimed at enhancing productivity and performance of its North American business bode well. Further, its cost containment efforts that target annualized cost savings of nearly $300 million by 2018 show promise. The company also remains positioned to gain from its plans to shut down underperforming North American stores as well as boosting online presence in order to bolster productivity and sales. However, we expect the persistent weakness in the office products sector, technological advancements and stiff competition to continue weighing on the company’s performance. International sales also remain a drag. Estimates have been stable lately ahead of the company’s fourth quarter earnings release.

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