Staples reported better-than-expected second quarter earnings and sales, but some analysts say the company's core remains weak. Staples closed 80 stores in North America during the quarter and expects to close about 140 more this year. Bank of America Merrill Lynch analyst Denise Chai said, 'While the closure of unprofitable stores is the right move, in our view, it does not address the greater problem of structural weakness in office supplies caused by falling demand, high competition and the disruptive effect of technology such as tablets.' She has an Underperform rating on Staples and prefers Buy-rated Office Depot.

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