Amazon sales continue to slow
Posted: Mon Dec 23, 2024 8:52 am
Is the US marketplace experiencing a slowdown? Amazon has presented its third quarter 2021 results, where we have seen that sales are not as high as expected, after having experienced a 2020 where online commerce became the main sales channel. Amazon's sales have been 49.9 billion dollars, which means that they have grown by 4% compared to the previous quarter and what the company could have grown normally before the pandemic.
The effects of the pandemic and the high globe number list online sales are beginning to dissipate, and there is no doubt about that when looking at Amazon's results.
Marketplacepulse has done its own analysis of the situation and shared the following graph:
Earnings: $6.12 vs. $8.92 per share expected
Revenue: $110.81 billion vs. $111.6 billion expected
Amazon's overall sales rose 15% ($110.8 billion) from a year ago, a marked slowdown from the previous quarter's 27% growth rate . Amazon got a boost from its flagship cloud computing platform Amazon Web Services, which grew revenue 39% to $16.1 billion.
One of the fastest growing lines of business is advertising. Amazon has seen sales reach $30 billion. This figure is getting closer to the marketplace sales figure, although it is still less than 10% of Amazon's overall business. Third-party sales and own sales had very similar results. Amazon has more and more of its own products on the web and better positioning.
The words of current Amazon CEO Andy Jassy have been as follows: “In the early months of COVID-19, Amazonians played an essential role in helping people get the PPE, food, and other in-demand items they needed, and we worked closely with companies and governments to leverage AWS to maintain business continuity as they responded to the pandemic. Customers have appreciated this commitment, which is part of what is driving the acceleration of AWS growth this past quarter to 39% year-over-year; but it has also driven extraordinary investments in our businesses to meet customer needs – just one example is that we have nearly doubled the size of our fulfillment network since the pandemic began. In the fourth quarter, we expect to incur several billion dollars in additional costs in our Consumer business as we manage labor shortages, rising wage costs, global supply chain issues, and higher freight and shipping costs, all while doing whatever it takes to minimize the impact on customers and sales partners this holiday season. It will be costly for us in the near term, but it is the right prioritization for our customers and partners .”
Predictions for the next quarter
The following forward-looking statements reflect Amazon.com's expectations as of October 28, 2021. Therefore, the company's current forecasts are:
Net sales are expected to be between $130 billion and $140 billion, or grow between 4% and 12% compared to the fourth quarter of 2020. This guidance anticipates an unfavorable impact of approximately 60 basis points from foreign exchange rates.
Operating income is expected to be between $0 and $3.0 billion , compared to $6.9 billion in the fourth quarter of 2020.
This guidance assumes, among other things, that no business acquisitions, restructurings or additional legal arrangements are concluded.
The effects of the pandemic and the high globe number list online sales are beginning to dissipate, and there is no doubt about that when looking at Amazon's results.
Marketplacepulse has done its own analysis of the situation and shared the following graph:
Earnings: $6.12 vs. $8.92 per share expected
Revenue: $110.81 billion vs. $111.6 billion expected
Amazon's overall sales rose 15% ($110.8 billion) from a year ago, a marked slowdown from the previous quarter's 27% growth rate . Amazon got a boost from its flagship cloud computing platform Amazon Web Services, which grew revenue 39% to $16.1 billion.
One of the fastest growing lines of business is advertising. Amazon has seen sales reach $30 billion. This figure is getting closer to the marketplace sales figure, although it is still less than 10% of Amazon's overall business. Third-party sales and own sales had very similar results. Amazon has more and more of its own products on the web and better positioning.
The words of current Amazon CEO Andy Jassy have been as follows: “In the early months of COVID-19, Amazonians played an essential role in helping people get the PPE, food, and other in-demand items they needed, and we worked closely with companies and governments to leverage AWS to maintain business continuity as they responded to the pandemic. Customers have appreciated this commitment, which is part of what is driving the acceleration of AWS growth this past quarter to 39% year-over-year; but it has also driven extraordinary investments in our businesses to meet customer needs – just one example is that we have nearly doubled the size of our fulfillment network since the pandemic began. In the fourth quarter, we expect to incur several billion dollars in additional costs in our Consumer business as we manage labor shortages, rising wage costs, global supply chain issues, and higher freight and shipping costs, all while doing whatever it takes to minimize the impact on customers and sales partners this holiday season. It will be costly for us in the near term, but it is the right prioritization for our customers and partners .”
Predictions for the next quarter
The following forward-looking statements reflect Amazon.com's expectations as of October 28, 2021. Therefore, the company's current forecasts are:
Net sales are expected to be between $130 billion and $140 billion, or grow between 4% and 12% compared to the fourth quarter of 2020. This guidance anticipates an unfavorable impact of approximately 60 basis points from foreign exchange rates.
Operating income is expected to be between $0 and $3.0 billion , compared to $6.9 billion in the fourth quarter of 2020.
This guidance assumes, among other things, that no business acquisitions, restructurings or additional legal arrangements are concluded.