Amazon Shares Plunge on Forecast for Sluggish Holiday Sales
Amazon.com Inc., shocking Wall Street, projected the slowest holiday-quarter growth in the company's history. The shares plunged about 14% in premarket trading.
The Seattle-based company, which reaped record profits during the pandemic, said sales during the current period will rise just 2% to 8% as shoppers reduce their spending in the face of economic uncertainty. Either figure would be the slowest increase ever for Amazon's “Peak” season, which usually finds warehouse employees rushing to get orders out on time. And the e-commerce giant's other businesses aren't riding to the rescue. Amazon Web Services, the cloud-computing division, and the advertising unit each reported muted third-quarter revenue growth by their lofty standards.
“We're taking actions to tighten our belt,” Chief Financial Officer Brian Olsavsky said Thursday on a call with journalists after the results were released. Olsavsky said Amazon would pause hiring in some businesses and wind down products and services in areas where the company determines its money would be better spent elsewhere.
The world's largest online retailer had spent this year adjusting to a sharp slowdown in e-commerce growth as shoppers resumed pre-pandemic habits. Amazon delayed warehouse openings, froze hiring in its retail group and shut down experimental projects. Some investors had hoped the company's commanding market share in the US and Europe, the massive scale of its logistics business and the cost-cutting would insulate Amazon from slowing consumer spending. The forecast suggests that isn't the case, and Amazon joined other previously high-flying tech giants such as Alphabet Inc. and Microsoft Corp. in reporting disappointing results.
Asked about how the upcoming shopping
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