Amazon Projects Slower Growth, Raising Fears of Consumer Letdown Inc. projected sluggish second-quarter sales growth, as the largest online retailer struggles to build off the dramatic gains it made early in the pandemic. The shares plunged about 10 percent in extended trading.

Revenue will be $116 billion to $121 billion in the period ending in June, Amazon said Thursday in a statement. Analysts, on average, estimated $125 billion, according to data compiled by Bloomberg.

Amazon has been grappling with rising energy and labor costs and changing shopping habits as people return to pre-pandemic activities. The company Thursday began rolling out a 5 percent fee charged to independent sellers on its website who use its shipping services, a move designed to blunt the impact of inflation and rising fuel costs. Earlier this year Amazon raised the price of its Prime speedy-shipping program by $20 to $139 a year in the US. Growth in Amazon’s main e-commerce business, which had been supercharged by the pandemic, has fizzled.

Despite those pressures, Wall Street analysts have been nearly unanimous in their optimism about Amazon’s prospects, citing the company’s massive investments in package handling and delivery capacity and continued growth in its highly profitable cloud-computing and advertising businesses.

“The pandemic and subsequent war in Ukraine have brought unusual growth and challenges,” Chief Executive Officer Andy Jassy said in the statement. “As we’re no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfilment network. We know how to do this and have done it before. This may take some time, particularly as we work through ongoing inflationary and supply chain pressures.”

Sales gained 7.3 percent to $116.4 billion, meeting analysts’ estimates. That’s the slowest pace of growth since 2001, and marks the first time Amazon has ever recorded back-to-back quarters of less than 10 percent revenue growth.

The company also reported a net loss of $3.8 billion, or $7.56 a share, compared with profit of $8.1 billion, or $15.79 a share, in the period a year ago. Amazon said it included a loss of $7.6 billion in non-operating expense from its investment in Rivian Automotive Inc. It was the company’s first net loss in seven years.

The shares dropped to a low of $2,560 in extended trading, after closing at $2,891.93 in New York. The stock has dropped 13 percent this year amid a broad decline in the S&P 500.

By Matt Day

Learn more:

How Can Viral Amazon-Native Beauty Brands Grow?

DEK of article you are adding as Further Reading

Credit: Source link






Lakshmi Menon Vogue India March 2022

Vogue India continues to undergo a major overhaul now that Megha Kapoor has found her footing. Zinnia Kumar fronted the new editor’s first...

Hair Perfumes That Will Make You Rethink Fragrance

Shampoo provides a refreshing aroma in the shower. But even the most potent don’t linger all day. Similarly, a liberal coating of a...

Actor Leonardo DiCaprio Is Accused Of Having Flings With Audrina Patridge In The Past

Leonardo DiCaprio, a well-known Hollywood actor, is the author of numerous acclaimed books. He has been happily dating model Camila Morrone for the...

Bitcoin Hits a 16-Month Low of $26K as Effects of the Terra Crash Spill Over

Bitcoin (BTC) nosedived to lows of $26,595, a scenario not seen since Dec 30, 2020, when the leading cryptocurrency dropped below the $27,000...
en English