As stores open outside of the major shopping centers, where store traffic andmargins are stellar, the effects of a slowing consumer economy in Europe are becoming more apparent.
The increase in fulfillment centers can be viewed as an investment in future growth and perhaps margins assuming better efficiencies, but an increase in variable costs per revenue can signal permanently declining margins.
The stock case for this resides in Amazon, which is continually investing in distribution centers, new products and its Amazon Web Services platform to the detriment of margins, and shareholders just keep paying 71.6 times forward earnings.