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SHARE OF THE WEEK: Amazon’s luck could go from bad to worse as it gears up to report its fourth quarter results
Amazon’s luck could go from bad to worse next week as it gears up to report its fourth-quarter results.
High inflation and shaky economic prospects caused retail sales to be lower than expected in the latest quarterly results, and the concerns are much the same as the numbers for the three months ended Dec. 31.
While analysts expect higher quarterly sales of £117 billion after Prime Day and Christmas sales, growth is expected to be slower than previous years.
The e-commerce giant has already gone on the defensive, announcing it will cut its workforce by 18,000 in a bid to cut costs.
Andy Jassy, chief executive, said in the note earlier this month that annual planning was “more difficult given the uncertain economy and we’ve been fast-tracking over the past few years.”
The company is also closing some Amazon Fresh stores in the UK, shifting focus back to its core e-commerce and cloud businesses.
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said Amazon is still facing unhelpful headwinds.
These include rising costs and tightening consumer spending, she said.
Lund-Yates added: “It will be important to keep an eye on the outlook when it comes to demand. With suspicions that interest rate hikes could slow, there is a chance that some positivity will come through.”