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Moody's: Amazon is ‘weakest’ of large retailers


Amazon isn't as dominant as is widely believed — at least not according to a new report from Moody's Investor Services.

Yes, the online giant continues to outpace other retailers when it comes to online sales growth, and its stock has gone through the roof. But it falls behind its large competitors in some key areas, according to Moody's VP and lead retail analyst Charles O’Shea, reported MarketWatch.

“Although Amazon’s share price is outperforming retailers, conventional methods of evaluating operating performance, such as operating margin or any profitability measure, suggest that Amazon is actually the weakest of the large retailers, excluding sales growth,” O'Shea wrote in a report. "And even based on that measure, one could argue that Amazon has been ‘buying’ sales for the past 15 years, considering profits have not been its primary focus — unlike other retailers.”

The report noted the crucial role the company's cloud services business, Amazon Web Services, has played in its growth.

"In terms of total revenues, Amazon continues to grow product sales in the mid-teens, which we note is lower than many brick & mortar retailers’ online growth,” O'Shea wrote. “But again, that growth is nowhere near the retailers’ overall profit levels.”

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