The latest quarterly financial data from Amazon indicates the e-commerce giant is expecting a Christmas slowdown.
Amazon had a relatively good Q3, according to its latest earnings call for the quarter. However, the e-commerce player is predicting a fall in sales for the coming quarter.
Amazon’s stock dropped following its weak Q4 estimates. Net sales are expected to be between $140bn and $148bn, marking growth of 2 to 8pc, assuming Amazon makes no acquisitions or restructurings.
Commenting on the forecast for the coming few months, Amazon CEO Andy Jassy said: “There is obviously a lot happening in the macroeconomic environment, and we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets.
“What won’t change is our maniacal focus on the customer experience, and we feel confident that we’re ready to deliver a great experience for customers this holiday shopping season.”
Sales for Amazon’s cloud business, Amazon Web Services, performed poorer than expected during Q3, generating 27pc revenue growth to reach $20.5bn. Microsoft’s cloud business similarly failed to meet revenue expectations this quarter.
Amazon reported that, overall, its Q3 sales were up 15pc year-on-year to $127.1bn. Its net income decreased by 9pc year-on-year to $2.9bn.
Q3 advertising services revenue grew 25pc to $9.55bn, which was marginally better than analysts had estimated. Subscription services revenue grew 9pc year-on-year to $8.9bn.
Last year Amazon’s Q3 earnings also yielded mixed results, as online shopping sales took a hit as pandemic restrictions eased. Supply chain issues were also a cause for concern, with Jassy assuring customers and investors at the time that the e-commerce giant would “do whatever it takes” to minimise the impact of such issues in the lead-up to Christmas.
The e-commerce giant’s conservative forecast for the holiday season ahead could be a signal for others to expect less consumer activity during a cost-of-living crisis.
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