Deutsche Bank Maintains Buy on Staples

Deutsche Bank is out with its report today on Staples SPLS, maintaining Buy. In a note to clients, Deutsche Bank writes, "It appears as if Staples needed to promote and invest costs to drive sales, leading to gross margins down 22 bps and expense ratios up 47 for a total margin decline of 69 bps to 5.9%. Consensus margin estimates were 6.5%. Competitor margins were down 178 for OMX and 87 bps, so SPLS looks better, but more is expected from the industry leader. By division, contract was down 43 bps, retail was down 2 bps and International was down 216 bps. Investments were in labor in the retail and International business and pricing in contract. Eventually Staples will win a pricing battle, but it may be painful for a time." Deutsche Bank maintains a $28 PT on SPLS. At the time of posting, shares of SPLS were trading pre-market at $16.60, down 15.52% from Tuesday's close.