As the normal lives of people have started to come back to normal, Amazon reports that its first-quarter earnings are not doing as good as they were predicted to do. Amid rising fierce e-commerce competition, and consumers’ return to in-person shopping, Amazon reported a rare quarterly sales miss and falling third-quarter projection, despite the fact that it had already held an early Prime Day in the month of June with consumers spending a record of $11billion.
The American e-commerce giant reported $113 billion in net sales over the three months ending June 30, up 27 percent versus the same period last year, however below analysts’ anticipations of $115 billion. Net product sales accounted for $58 billion, while net service stood at $55 billion.
This was not how Andy Jassy wanted his first earnings to go. Therefore, he neither spoke on the subject nor discussed the quarterly earnings conference call with analysts and investors. Nevertheless, Chief Financial Officer Brian Olsavsky said moderated spending from Prime members and consumers’ increased mobility as vaccination rates rise were key contributors to the deceleration. He also noted that over the past 18 months, Amazon has struggled to properly estimate the impact of COVID-19, typically overperforming projections. “I think the impact of people getting vaccinated and getting out in the world — not only shopping offline but also living life and getting out — it takes away from shopping time,” Olsavsky said on the conference call.
However, did not have anything to announce when questioned about the possibility of having a second Prime Day considering the fact that it helped early this year in June.“Our trend has been once a year,” he said.
Bringing some happy news to the table, Olsavky mentioned that Amazon is making a considerate amount of investment in its fulfillment network with demand for Fulfillment by Amazon from third-party sellers continues to boom. He even mentioned that over the period of one and a half years, Amazon’s entire fulfillment network has nearly doubled in size. The number of products being fulfilled by Amazon has doubled in the past two years, and the delivery arm of the fulfillment business has more than 2 times in that same time duration.