Amazon
AMZN
, which is currently reeling under the pressure of stubbornly high inflation and a slowdown in online shopping activities, plans to sell excess space on its cargo planes.
Reportedly, the company is looking for possibilities to fill empty aircrafts returning from Hawaii and Alaska with pineapples and salmon.
Notably, softness in the demand for air cargo and slowing online sales this year compared to the same in the past two years, which led to sluggish revenue growth, created extreme pressure for the company to boost its profits by making money of its unused space.
The softening demand for air cargo is likely to continue in 2023.
Moreover, the latest plan is likely to aid Amazon in countering the impacts of aggravating fears regarding the recession, which have been hurting the spending patterns of customers, as well as investor sentiment.
Bottom Line
Apart from the latest move, the company recently took the step of subletting extra spaces in its warehouses and slashing 10,000 jobs.
These endeavors are expected to aid Amazon’s financial performance, as well as its sustainability, in this unstable economy.
The company’s growing efforts toward expanding its physical presence is likely to boost its prospects in the scenario of declining online shopping activities.
Recently, the e-commerce giant opened an Amazon Go store in Woodland Hills, which marks its third cashierless store in Los Angeles, CA.
The opening of its first clothing store, Amazon Style, in Glendale near Los Angeles remains positive.
The company’s intentions to expand its Whole Foods store network across the United States are noteworthy.
The increasing number of Amazon Fresh grocery stores across the United States is a positive.
The increasing number of Amazon 4-star stores, which stock four-star or beyond-rated products from categories like kitchen appliances and other items, home stuff, toys, books, devices, consumer electronics and games, remains another positive.
Amazon’s strong strategies, which are primarily focused on providing an enhanced shopping experience with the help of its wide product offerings, deep discounts on various items, robust Prime program and ultra-fast delivery services, are likely to boost its e-commerce prospects once the fear of recession subsides.
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
,
American Eagle Outfitters
AEO
and
Penske Automotive Group
PAG
. While Ross Stores currently sports a Zacks Rank #1 (Strong Buy), American Eagle Outfitters and Penske Automotive Group carry a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Ross Stores has gained 1.1% on a year-to-date basis. The long-term earnings growth rate for ROST is currently projected at 10.5%.
American Eagle Outfitters has lost 42.4% on a year-to-date basis. The long-term earnings growth rate for AEO is currently projected at 11.6%.
Penske Automotive Group has gained 4.7% on a year-to-date basis. The long-term earnings growth rate for the PAG stock is currently projected at 6.7%.
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