Amazon.com Inc. (AMZN - Free Report) announced plans to open its second fulfillment center in Mississippi in order to meet the growing demand for online shopping.
The company has been spending heavily on new fulfillment centers over the past few years. Fulfillment centers are giant warehouses that help online retailers store and ship products, as well as handle returns quickly. These are important for providing the level of service that customers have started expecting from Amazon.
Inside the Headlines
The latest fulfillment center will span more than one million square foot and create 500 full-time jobs. The center will primarily focus on large consumer goods such as sports equipment, patio furniture, fishing rods, pet foods, kayaks, bicycles and several household commodities.
Amazon stated that it will pay a minimum hourly wage of $15, and provide healthcare along with other full-time benefits to all the workers employed in the facility. In addition, the company will offer programs like Career Choice to help employees pursue courses related to fields that are in demand. Moreover, the online giant will provide other employee benefits like generous maternity and parental leaves.
Amazon.com, Inc. Price, Consensus and EPS Surprise
Amazon has been strengthening presence all over the world.
In our view, the company must maintain its U.S. market share while expanding globally, in order to retain the leading position. To this end, it needs to invest more in fulfillment, technology and content, especially in international markets with less penetration and higher growth rates.
Although increased expenses may hurt Amazon’s bottom line in the near term, we believe that the same is necessary to maintain its dominance in this highly competitive market.
Zacks Rank & Stocks to Consider
Currently, Amazon has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Advantest Corp. (ATEYY - Free Report) , Itron, Inc. (ITRI - Free Report) and AMETEK, Inc. (AME - Free Report) . While Advantest sports a Zacks Rank #1 (Strong Buy), Itron and AMETEK carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Advantest, Itron and AMETEK is currently projected at 15.5%, 25% and 10.9%, respectively.
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