Amazon says consumers cautious, forecasts revenue below Wall Street targets
Amazon.com reported slowing online sales growth in the second quarter and said cautious consumers were seeking out cheaper options for purchases, sending shares down nearly 8%.
The after-hours stock drop came despite second-quarter profit and cloud computing sales that beat analyst estimates. Amazon shares had gained over 20% this year through the session close on Thursday, and investors were disappointed that the company forecast current-quarter sales below Wall Street estimates.
Amazon's CFO, Brian Olsavsky, told reporters on a call that consumers «are continuing to be cautious with their spending trading down.»
He added, «They are looking for deals,» and noted that lower priced products were selling briskly.
CEO Andy Jassy agreed, adding on a call with analysts that customers were trading down on price when they could. Amazon's online retail business has faced heightened competition from budget retailers like Temu and Shein, which sell a wide variety of goods at bargain-basement prices direct from China.
The comments echoed similar ones from Oreo-maker Mondelez, PepsiCo and Kraft, which in recent days highlighted challenges facing American consumers.
Amazon's online stores sales rose 5% in the second quarter to $55.4 billion, compared with growth of 7% in the first quarter.
One analyst said slowing retail sales growth was driving the post-market shares sell-off.
«They're showing continued momentum on cloud in terms of re-acceleration and so that's certainly where I think investors will be more positive,
