Will Spanish Union's Worker Strike Hurt Amazon (AMZN)?
Amazon AMZN is likely to face a jolt in its preparation for the holiday season in the form of a workers’ strike in Spain on Cyber Monday.
Reportedly, the Spanish labor union named CCOO had recently called around 20,000 warehouse and delivery workers at one of Amazon’s local units to plan for a strike on Nov 27 to demand a wage hike, labor safety and an increase in human resources staff.
The union is of the opinion that the workers’ pay does not reflect the volume of workload and the company should understand and acknowledge workplace risks in Spain.
CCOO intends to call a one-hour strike in each of the three shifts on Cyber Monday at Amazon.
Amazon.com, Inc. Price and Consensus
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Disruption at Amazon
The workers’ strike on Cyber Monday, which is known to be a hectic shopping day of the holiday season for online retailers, is a matter of grave concern. This is likely to affect the e-commerce giant’s pre-Christmas business.
Hence, such a broad action by workers in Spain, which is an essential market for Amazon, is expected to jeopardize its prospects this holiday season.
We note that the warehouses and fulfillment centers aid AMZN in storing and shipping products and handling returns quickly. The delivery workers and their efficiency hold much significance for Amazon in delivering an enhanced shopping experience to customers.
Consequently, the strike might impact Amazon’s holiday sales negatively. This might make investors apprehensive about the stock.
Amazon’s Stance
However, Amazon reportedly claimed that the workers are availing of safe, secure and modern working conditions, along with good competitive pay and other benefits.
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.
AMZN’s automation drive, through robots in its fulfillment centers, is on a high and remains a major positive.
These strategic endeavors are likely to drive its sales as well as sustain its momentum this season in many countries like the United States, the U.K., Canada and Australia, to name a few.
For fourth-quarter 2023, Amazon expects net sales between $160 billion and $167 billion, which represents 7-12% year-over-year growth.
AMZN has gained 74.8% year-to-date, outperforming the industry’s growth of 45.1%.
Zacks Rank & Other Stocks to Consider
Currently, Amazon carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the retail-wholesale sector are Booking Holdings BKNG, Costco Wholesale COST and 1stdibs.com DIBS. These three stocks currently carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Booking Holdings has gained 55.9% on a year-to-date basis. The long-term earnings growth rate for the BKNG stock is currently projected at 21.57%.
Year to date, Costco has gained 29.8%. The long-term earnings growth rate for the COST stock is currently projected at 8.55%.
1stdibs.com has lost 14.6% on a year-to-date basis. The long-term earnings growth rate for the DIBS stock is currently projected at 4.2%.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
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