NEW YORK (TheStreet) -- Brick-and-mortar retailers Staples (SPLS) and RadioShack (RSH) have ended their participation in Amazon Lockers, a program that allows Amazon (AMZN) shoppers to collect online purchases in stores. The partnership was initially expected to increase foot traffic and incremental sales for the retailers, reports Bloomberg.
Judging by the most recent balance sheets, the partnership wasn't as fruitful as hoped for. In the second quarter 2013, RadioShack reported net sales were $845 million, compared to $849 million in the same quarter a year earlier, and gross profit was down from $340 million a year earlier to $314 million. In the same quarter, Staples reported a 2% decrease in company sales from second quarter 2012 to $5.3 billion.
The House Judiciary Committee met yesterday to outline guiding principles for a U.S. Internet sales tax and to ensure retailers have "equal footing".
In a press release, Chairman Bob Goodlatte (R-Va.) said, "The aim of the principles is to provide a starting point for discussion in the House of Representatives." The timeline for the proposal and implementation of any tax-related laws is not yet known.
Speaking with Fortune last year, Amazon CEO Jeff Bezos came out in support of federal legislation to ensure online companies pay sales tax.
Amazon shares are up 0.08% as of 10:15 A.M EST. The stock opened the day at $313.77 compared to the previous trading day's close of $312.03. Overall, Amazon is leading the S&P 500 which is down 0.01%.
TheStreet Ratings team rates Amazon as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate Amazon a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Amazon's revenue growth has slightly outpaced the industry average of 17.7%. Since the same quarter one year prior, revenues rose by 22.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet & Catalog Retail industry. The net income has significantly decreased by 200% when compared to the same quarter one year ago, falling from $7 million to -$7 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Internet & Catalog Retail industry and the overall market, Amazon's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: AMZN Ratings Report