Amazon’s second-quarter results disappointed, intensifying pressure on markets. The US giant reported net sales for the period of $147.98 billion, below analysts’ estimates of $148.78 billion. The forecast for third-quarter sales was also below analysts’ average forecast.
But for a company with the impact of Amazon, this news is also a “bell” for the economy. The company said shoppers looking for discounts and good deals weighed on second-quarter sales, painting a bleak picture for the economy as high prices continue to weigh on American wallets.
In a briefing to reporters, Amazon CFO Brian Olsavsky said shoppers were “cautious” and “bargain hunting,” buying the cheapest products whenever possible, Business Insider reported. This has helped boost Amazon’s lower-priced Everyday Essentials category, which includes food, health and personal care items. But their lower prices hurt sales.
Low consumer demand in the third quarter as well
Amazon on Thursday reported second-quarter earnings, pointing to shoppers being more careful with their spending, trading up on lower-priced items when possible. It also said it will do a lot of its own spending as it develops its AI capabilities.
And while the CEO of Amazon, Andy Jassi said that “more discrete, higher-value items” such as computers and other electronics are “rapidly growing” for the company, and issued a warning. Those categories are growing “slower than we see in a more robust economy,” he said.
Olsavsky said the third quarter would be difficult to predict precisely because buyers are likely to be busy with major global events such as the US presidential campaign and the Olympics. “We see different traffic patterns during these events,” he said.
Amazon isn’t the only company seeing signs of shopper fatigue from price hikes. Shoppers are also showing elsewhere that they are weary of price hikes, leading retailers to offer constant promotions to lure customers back.
Source: ot.gr
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