Amazon shares fall nearly 20% after company predicts weaker holiday sales | Amazon
Amazon shares fell nearly 20 percent in after-hours trading Thursday after the company said its all-important holiday shopping season would be smaller than expected.
The company is the latest tech giant to disappoint Wall Street this week. After enjoying phenomenal growth during the pandemic, Amazon has struggled to contain costs as inflation and rising interest rates take their toll. The company has slowed the rollout of new facilities, leased out some warehouse space and instituted a hiring freeze in parts of its business.
For the three months ending Sept. 30, Amazon reported sales of $127.1 billion, slightly less than analysts expected. The company posted a profit of $2.9 billion after losing money for two quarters. But it was Amazon’s holiday quarter guidance that worried investors.
Amazon said it expected net sales of between $140 billion and $148 billion in the fourth quarter, while analysts expected sales of $155.15 billion.
Andy Jassy, Amazon’s chief executive, said he is “encouraged by the continued progress we are making in reducing costs in our store fulfillment network and that we have a number of initiatives we are methodically working on that we believe will bring higher cost structures to the business moving forward.”
“Obviously, there is a lot going on in the macroeconomic environment, and we will balance our investments to be more efficient without jeopardizing our key long-term, strategic bets.” What won’t change is our maniacal focus on customer experience, and we’re confident we’re ready to deliver a great customer experience this holiday shopping season.”
Amazon’s results follow disappointing numbers from its Big Tech peers. Share price of Meta’s Facebook parent fell to a multi-year low this week after reporting its second straight quarter of falling revenue and warning of rising costs and losses at its metaverse unit. Alphabet and Microsoft stock prices fell after forecasts of slower sales growth.
In July, Amazon released its second quarterly loss in turn, much of the loss was due to an investment in Rivian Automotive, the struggling electric vehicle maker, but rising costs and slowing sales also dented sales at its online business.
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