F. Carter Smith/Bloomberg via Getty Images; Chelsea Jia Feng/BI
- Amazon says that deal-seeking shoppers dented its sales.
- Next quarter might be rough, too. The Olympics and the US election might distract people, it says.
- Amazon is presenting a bleak picture of the economy as rising prices batter American wallets.
Amazon said deal-hungry shoppers dented sales in the second quarter, presenting a bleak picture of the economy as prices continue to batter American wallets.
Amazon missed sales estimates Thursday, and the retail giant said it anticipated softening consumer demand in the third quarter — which sent shares falling in after-hours trading.
On a call with reporters, Amazon CFO Brian Olsavsky said shoppers were "cautious" and "looking for deals" — trading down to lower-priced items whenever possible.
That helped boost Amazon's lower-priced Everyday Essentials category, which includes non-perishable foods, health, and personal care items. But those lower-priced items weighed on sales.
And while Amazon CEO Andy Jassy said that "more discretionary, higher-ticket items," like computers and other electronics, were "growing fast" for the company, he still sounded a note of caution.
Those categories are growing "more slowly than we see in a more robust economy," he warned.
Distractions like the Olympics and the US elections could also weigh
Looking ahead, Olsavsky said the third quarter would be difficult to accurately forecast because shoppers are likely to be preoccupied by major world events like the US presidential campaign and the Olympics.
"We do see different traffic patterns during those events," Olsavsky said.
At the same time, he noted that Prime Day in July — Amazon's 10th — was its "largest ever."
Prime Day deals could present some headwinds to operating profits, he said. And cautious consumers could dent sales, the company said.
Amazon isn't alone in flagging shopper fatigue with rising prices.
Shoppers are showing elsewhere that they're sick of price increases — leading retailers to say that they're offering deals to try to entice people back.
American pocketbooks have been battered by rising prices, with certain items getting even more expensive even as inflation gradually cools.