Amazon’s holiday season sales forecasts are lower than analysts’ expectations, indicating that the epidemic’s boost to online shopping continues to weaken. The stock fell about 4% in after-hours trading.Amazon’s revenue and profit in the third quarter were also lower than forecasts, and said that the cost of negotiating supply chain issues and increasing employee deliveries during the holiday season will further reduce profits.
The company announced on Thursday that its fourth-quarter revenue is expected to be between US$130 and US$140 billion. Analysts surveyed expected an average value of 141.6 billion US dollars.
The third quarter is the first quarter under the leadership of the new CEO Andy Jassy-he took over the world’s largest online retailer from Jeff Bezos in July. Amazon’s stock price has risen by 5.8% this year, underperforming the market, as consumers who switched to online shopping during the pandemic began to resume shopping in stores. Amazon has hinted that slow sales growth and high spending in areas such as wages and new warehouses will continue until the end of this year.
Although the company sought to convince shoppers and investors earlier this week that previous investments have enabled it to cope with global supply chain dilemmas, Jassy said on Thursday that spending comes at a price.
“In the fourth quarter, we expect the consumer business to incur billions of dollars in additional costs because we face labor shortages, increased wage costs, global supply chain issues, and higher shipping costs,” he said in the statement. “It is very costly for us in the short term, but for our customers and partners, this is the right priority.”
Amazon’s third-quarter revenue increased by 15% to 110.8 billion U.S. dollars, while the average analyst forecast was 111.8 billion U.S. dollars. The company said that earnings per share were US$6.12, lower than the US$12.37 in the same period last year.
Amazon Web Services, the cloud computing division that contributed most of the profits, achieved sales of $16.1 billion, an increase of 39%.