[CNBC] Amazon shares slide on revenue miss, disappointing guidance for third quarter

[papy]

Another time that the headline misses the real story…

Amazon continues to reckon with sluggish growth in its core retail business, as competition heats up, largely from discount sites like Temu and Shein, which allow Chinese merchants to sell cheap items to U.S. consumers. Sales in its online stores segment grew just 5% year over year. Revenue from third-party seller services, which includes commissions, and fulfillment and shipping fees, is accelerating faster, expanding 12% during the quarter.
…
Olsavsky said the driver for the miss was that consumers were choosing to buy cheaper products, leading to lower average selling price (ASP).

Once again, 3P Sellers to Amazon’s rescue! They want to host the Sellers who prop them up the most, and I suspect that this factoid…

*Amazon’s advertising revenue soared 20% to $12.77 billion during the quarter…The unit has emerged as one of Amazon’s biggest profit generators, and although the bulk of its ad sales continue to come from sponsored product listings on its online store, the company has added newer offerings and grown its market share in the digital ad segment

…contributes even more to feeding Amazon than FBA fees.

Amazon shares slide on revenue miss, disappointing guidance for third quarter

[dwat0870]

@papy

Revenue from third-party seller services, which includes commissions

Well, if they would just filter more business my way I would actually be willing to provide even more cash flow to them.

I’m not saying that business sucks, BUT I had the first ZERO sales day in a few years (except when I have been on vacation) the other day.

Brutal.

I did put in an order with my main (not dealer direct) sources and my sales rep said they are FINALLY picking up a bit after being very slow for a while!

[ASV_Vites]

@papy

…contributes even more to feeding Amazon than FBA fees.

Someone around here has been talking about this for years.

[Jenga244]

It makes sense…there were definitely a lot more plants and plant seed sales this quarter than most.

[lake]

Jassy has done a super job of cutting fat and maximizing the retail profits. The desperate need of many for a selling environment online had led to the major increase in advertising spending.

The concerns about AWS are more important because it is AWS not retail which justifies the P/E multiple that Amazon stock carries.

The drop in the stock is tied to the justification for the multiple not the Amazon bottom line.

Microsoft’s cloud revenues also softened, Google has had headwinds for its cloud operations as well.

I will readily make a SELL recommendation for anyone holding Amazon stock. I do not see a growth source to justify a P/E even close to 47.

What does it mean to the economy? Amazon shareholders will have less to spend. Good thing Jeff already has his boat.

Cloud revenues may be close to their top for all providers. Maybe the AI boom in the cloud won’t happen because companies might be loath to invest. Maybe electricity use and prices might not climb as much without this growth in the cloud.