Online giant forecasts weak holiday sales growth ahead
SEATTLE — Amazon reported that its net sales increased 15% to $127.1 billion in the third quarter, compared with $110.8 billion in the third quarter of 2021. Excluding the $5.0 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased by 19% compared with last year’s third quarter.
Net income decreased to $2.9 billion in the third quarter, or $0.28 per diluted share, compared with $3.2 billion, or $0.31 per diluted share, in the third quarter of 2021. But the quarter marked a return to profitability for Amazon after two quarters of losses. Amazon noted that its third quarter 2022 net income includes a pre-tax valuation gain of $1.1 billion included in non-operating income from the common stock investment in Rivian Automotive Inc., an electric vehicle maker.
“In the past four months, employees across our consumer businesses have worked relentlessly to put together compelling Prime Member Deal Events with our eighth annual Prime Day and the brand new Prime Early Access Sale in early October,” Amazon CEO Andy Jassy said. “The customer response to both events was quite positive, and it’s clear that particularly during these uncertain economic times, customers appreciate Amazon’s continued focus on value and convenience. We’re also encouraged by the steady progress we’re making on lowering costs in our stores fulfillment network, and have a set of initiatives that we’re methodically working through that we believe will yield a stronger cost structure for the business moving forward. There is obviously a lot happening in the macroeconomic environment, and we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets. What won’t change is our maniacal focus on the customer experience, and we feel confident that we’re ready to deliver a great experience for customers this holiday shopping season.”
Looking ahead to the fourth quarter and the holiday period, Amazon said it expected net sales of between $140.0 billion and $148.0 billion, which would represent growth of between 2% and 8% compared with the fourth quarter of 2021. This guidance anticipates an unfavorable impact of approximately 460 basis points from foreign exchange rates. The company also forecast that its operating income would be between $0 and $4.0 billion, compared with $3.5 billion in the fourth quarter of 2021.