Stamps.com Ends Exclusive Partnership with US Postal Service

Ending Exclusive Partnership

As reported by MarketWatch, Stamps.com Inc. revealed Thursday afternoon that it is ending its partnership with the U.S. Postal Service, helping to explain a disappointing forecast provided earlier that sent shares plunging.

The explanation did not help, as shares continued to dive and were recently down nearly 48% in after-hours trading.

"We will no longer be exclusive to the USPS and that's non-negotiable," Chief Executive Kenneth McBride said of demands his company made in negotiations to renew their revenue-sharing agreement.

"The USPS has not agreed to accept these terms or any other terms of our partnership proposal. So at this point, we've decided to discontinue our shipping partnership with the USPS so that we can fully embrace partnerships with other carriers who we think will be well-positioned to win in the shipping business in the next five years."

McBride later stressed that Stamps.com will still be able to sell stamps. "Note that our decision to discontinue our exclusive partnership with the USPS does not in any way impact our regulatory relationship with them or the products and services we are able to offer our customers."

McBride further stressed that the move is an effort to service other carriers such as FedEx, UPS and Amazon.com Inc.

Stamps.com Stock Plunges 50%

Bloomberg reports that Stamps.com Inc. forecast full-year profit that was nearly half of the average of analysts’ estimates, as it ended a crucial partnership with the U.S. Postal Service.

Shares plunged over 50 percent in post-market trade.

The company (Stamps.com) said the discontinuation will result in some short term pain, and now expects 2019 adjusted profit to be in the range of $5.15 to $6.15 per share, while analysts had estimated earnings of $10.79 per share for the year.

Revenue forecast also disappointed, with Stamps expecting a range of about $540 million to $570 million, compared to analysts’ estimate of $689 million, according to data compiled by Bloomberg.

Related White Papers

The Other Half of Your Net Landed Cost of Goods
This educational paper highlights ways to reduce your net landed cost of goods, by revisiting your company’s CoD costs, find out how you can get better control by focusing on common areas of cost overages. Download Now!

Wholesale Marine Streamlines and Accelerates Order Fulfillment
Wholesale Marine utilizes dimensional pricing software to eliminate costs and reduce labor-intensive processes. Download Now!

Reduce Shipping Costs with a Transportation Management Execution System
Transportation Management Execution Systems can evaluate all aspects of a shipper's business to help increase savings and performance. Download Now!

Seven Practical Tips to Eliminate Hidden Shipping Costs
Many companies have significantly reduced their shipping costs by implementing a multi-carrier shipping solution that allows them to compare carrier rates and automate document production, however, you can realize even greater savings by ensuring that your shipping system is configured to pre-empt many common issues that result in hidden freight costs. Download Now!

More Shipping Resources from Logistyx Technologies