October 28, 2022
Amazon fell short of expectations on Thursday as its predictions of a slowdown in sales over the Christmas period, the busiest period of the year, came true following Wall Street’s revelations that Amazon’s stock had plunged.
Amazon shares fell more than 20% in after-hours trading after the release of its quarterly results. It predicted sales of $140 billion to $148 billion for the quarter, a slight year-on-year increase but below analysts’ expectations. Its 12% extended-trade stock drop wiped out about $140 billion in market capitalization.
Amazon has grown exponentially in recent years as it annexed industries and people spent more time and money online. Its stock prices have soared; but inflation has reduced consumers’ ability to spend online.
The war in Ukraine continues to have an impact on the global economy, with food and gas prices remaining high and concerns about the conflict that has left Amazon struggling against worrisome macroeconomic tides that have not spared companies such as Google, Meta, Microsoft, and even Apple, the world’s most valuable company, which had to warn investors that sales growth would slow in the crucial holiday season.
Due to the worrisome macroeconomic tides, Amazon has held two major sales events in a year: Prime Day in July and Prime Early Access Sale this month. During Prime Day sales in July, Amazon sold more items to its Prime loyalty shoppers than ever before, while continuing to seek revenue from higher Prime subscription fees and a surcharge on some merchants.
The sources for this piece include an article in Reuters.
