Amazon Cautions That When the News Gets Nutty, People Shop Less
The e-commerce giant reported a profitable second quarter, but warned that the third quarter will be harder to predict.
The e-commerce giant reported a profitable second quarter, but warned that the third quarter will be harder to predict.
Political violence. The Olympics. An unpredictable presidential election. A chaotic summer of news has distracted consumers, making it hard to know how they will spend, Amazon said Thursday.
“When high profile things happen, or the assassination attempt a couple weeks ago, you’re seeing that people shift their attention to news,” Brian Olsavsky, Amazon’s finance chief, said on a call with reporters, adding, “This is going to be a tough quarter to forecast.”
The admission came as Amazon reported on Thursday one of its most profitable quarters on record. But it also told investors to expect a somewhat slower and less profitable third quarter than anticipated, sending stock prices down 5 percent in after-hours trading.
The company had $148 billion in sales from April through June, up 10 percent from a year earlier. Profit hit $13.5 billion, roughly double since the same period last year.
The profit surpassed Wall Street’s expectations, though the sales fell short.
Sales growth in Amazon’s retail business in North America slowed slightly and was up 9 percent, reaching $90 billion. But that business has become more profitable, with operating margins of 5.6 percent, compared with 3.9 percent a year earlier.
Mr. Olsavsky said consumers were favoring lower-cost products and those that arrive quickly. But when customers are distracted by the news, they sometimes skip purchases entirely.
