Amazon Shares Slump As Shoppers Head Back To Stores

Amazon.com on Thursday said sales growth would decelerate in the third quarter as customers leave their homes more, a slow start to the reign of CEO Andy Jassy as investors weigh if he can steer the retailer as deftly as Jeff Bezos did for 27 years.

Shares fell 5 percent in after-hours trade.

Last year, many consumers were at home due to the Covid-19 pandemic, making for a tough comparison this quarter, said chief financial officer Brian Olsavsky on a call with reporters. In addition, customers are going out more and doing less online shopping.

The company is working to get employees vaccinated but did not announce any mandates. Amazon has not made any assumptions about rising Covid cases globally from the more contagious Delta variant but hopes the virus is eliminated and the economy continues to come back.

The top job Jassy inherited on July 5 has never been bigger and more complex. Last quarter Amazon announced a deal to buy the film studio MGM for US$8.5 billion, expanding in Hollywood at the same time as it is running a grocery chain, building a healthcare business and facing scrutiny from regulators worldwide.

During the Covid-19 pandemic, shoppers turned to Amazon while brick-and-mortar stores closed. Amazon posted record profits, drew more than 200 million Prime loyalty subscribers, and recruited over 500,000 workers to keep up with surging demand.

Now, the company's breakneck growth is starting to subside. Revenue climbed 27 percent to US$113 billion for the second quarter that ended on June 30, shy of analysts' average estimate of US$115 billion, according to IBES data from Refinitiv. For the third quarter, Amazon expects sales will grow at most 16 percent. (Reuters)