Amazon Finally Wobbles As Earnings Fail To Meet Expectations
As Amazon struggles to get traction in Australia the big US online trader has missed global earnings forecasts with analysts claiming that their biggest market, the USA has reached saturation point.
Revenue gained 29 percent to $56.6 billion in the third quarter, Analysts’ projected $57.1 billion.
Sales went from $66.5 billion to $72.5 billion in the current period, falling short of analysts’ average estimate of $73.8 billion.
Shares immediatly fell as much as 6.5 percent in extended trading. In Australia the Company is set to relaunch the brand with new products and categories set to be introduced in November.
The online giant said it expected year-on-year sales growth of 10% to 20% for the three months to 31 December.
That would be a marked slowdown from the 29% jump in sales for the most recent quarter to $56.6bn.
Amazon also made record profits of $2.9bn in the period, compared with $256m last year.
According to Deloitte Insights U.S. shoppers were projected to increase their online spending by as much as 22 percent this holiday season with Amazon set to benefit from the projected growth.
The company reported slowing revenue growth in all categories quarter over quarter, including online sales and subscription sales, Amazon Web Services sales and its fast-growing advertising business.
Amazon has relied on the growth of its Prime members, estimated at about 97 million in the U.S., who pay fees in exchange for shipping discounts, video streaming and other services.
This service was recently launched in Australia.
To compensate for a projected downturn in online sales the Company is investing in physical stores and the pharmacy business.
It purchased online pharmacy PillPack in June, which followed its $13.7 billion acquisition of Whole Foods last year to jump start its grocery business.
It has opened cashier-less AmazonGo stores — which sell premade sandwiches, salads and grocery items — in San Francisco and Chicago.