Yahoo Finance Will Workers Strike Affect Amazon's (AMZN) Holiday Prospects?
Amazon AMZN is likely to face challenges during the peak shopping hours of this holiday season in the form of a workers’ strike in Germany in the coming days.
Reportedly, the German labor union Verdi has asked the workers at Amazon’s seven German distribution centers to join the rolling strikes that would take place at alternate locations as a protest against poor pay hikes.
The union is of the opinion that the inflation factor has not been considered in the pay hikes for the workers.
Verdi has come up with the idea of alternating strikes this time, which would not give Amazon much time to prepare for the work stoppages.
Amazon.com, Inc. Price and Consensus
Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote
Disruption at Amazon
The workers’ strike at the time of Christmas – the busiest shopping period, for an online retailer is a matter of grave concern. This is likely to affect the e-commerce giant’s pre-Christmas business.
Hence, such a broad strike by Amazon employees in Germany, the company’s second-largest market, is expected to jeopardize its holiday season prospects.
We note that the shipment and fulfillment centers aid AMZN in storing and shipping products and handling returns quickly. These are crucial for Amazon for providing a better shopping experience to its customers.
Consequently, the strike might impact Amazon’s holiday sales negatively. This might make investors more apprehensive about the stock.
AMZN has lost 47.3% on a year-to-date basis compared with the industry’s decline of 41.8%.
Amazon’s Stance
As per the past opinions given by Amazon, the workers are availing of safe, secured and favorable working conditions along with good career opportunities, robust benefits and excellent pay.
Additionally, Amazon’s strong strategies are primarily focused on providing an enhanced shopping experience with the help of its robust product offerings, deep discounts on various items, Prime program, expanding freight and fast delivery services.
Further, Amazon’s automation drive-through robots in its fulfillment centers are on a high and remain major positives.
These strategic endeavors are likely to continue driving its sales this season in many countries like the United States, the U.K., Canada and Australia, to name a few.
Zacks Rank & Stocks to Consider
Currently, Amazon carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the retail-wholesale sector are Ross Stores ROST, Rush Enterprises RUSHA and Expedia Group EXPE. While Ross Stores and Rush Enterprises sport a Zacks Rank #1 (Strong Buy), Expedia carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ross Stores has lost 0.2% on a year-to-date basis. The long-term earnings growth rate for the ROST stock is currently projected at 10.5%.
Rush Enterprises has lost 10.2% on a year-to-date basis. The long-term earnings growth rate for the RUSHA stock is currently projected at 15%.
Expedia has lost 51.2% on a year-to-date basis. The long-term earnings growth rate for the EXPE stock is currently projected at 14%.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
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