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Last week, Amazon reported Q3 earnings of $6.12 per share and $110.81 billion in Q3 total revenue, both of which were lower than Refinitiv's expectations of $8.92 per share and $111.6 billion.
Q4 is already underway, and poor data has shaken investors and investor confidence, with Amazon shares falling more than 4 percent in extended trading on Oct. 28.
In response to the slowdown in revenue growth, Amazon responded that the global supply chain problem is not alleviated is the root of the problem, in addition, the epidemic has entered the inflection point, consumers gradually return to physical store consumption, making Q3 revenue growth of 15%, lower than 37% in the same period last year.
Amazon expects Q4 sales to be between $130 billion and $140 billion, an increase of between 4% and 12%. FactSet analysts expect revenue to grow 13.2 percent year-over-year to $142.1 billion.
Amazon CEO Andy Jassy said labor shortages, increased staff costs, global supply chain stagnation and increased freight costs have caused Amazon to bear billions of dollars in additional costs in Q4.
The countdown to the year-end peak season is already in the way, and Amazon is trying to get rid of these headwinds. Andy Jassy said in a statement that this is a large load for Amazon in the short term, but it is undoubtedly the right choice for the company's partners and consumers who have always chosen and trusted Amazon.
Amazon has come to a considerable cost to support the shortcomings of its global supply chain, including new shipping ports and the purchase of additional cargo planes and trucks to alleviate the stagnant circulation of goods.
Amazon said earlier in October that it planned to recruit 275,000 new regular and casual workers nationwide in response to the next shopping spike. Chief Financial Officer Brian Olsavsky said that last quarter, Amazon generously gave employee benefits, including the issuance of bonuses of up to $3,000 and the introduction of a new welfare system, such as reimbursement of some college tuition, etc., in order to retain excellent employees as much as possible. Amazon is expected to bear $4 billion in costs associated with labor, inflation, and warehouse turnover.
Amazon said operating profit in Q4 is expected to be between $0 and $3 billion, a significant decline from an operating profit of $6.9 billion in the same period last year.
The Q3 fiscal quarter showed that online sales increased by 3% from the same period last year to $49.9 billion, while the revenue of physical stores increased by 13% to $4.27 billion; and the revenue from services from third-party sellers (including commissions and FBA shipping fees, etc.) increased by 18% to $24.25 billion, compared with 34% of Q2 and 60% of Q1.
Amazon Cloud Services (AWS) revenue rose 39 percent to $16.11 billion, slightly beating analysts' $15.48 billion estimates. AWS generated $4.88 billion in revenue for the quarter, compared to the parent company's operating profit of just $880 million. Investors commented that the huge profits recorded by AWS really put a fig leaf on Amazon's Q3.
In addition, Amazon's Q3 product net sales were $54.9 billion, while the combined revenue from Amazon's cloud services, advertising, third-party seller services, and Prime membership subscriptions was $55.9 billion, achieving a breakthrough in total retail sales of goods, which may mark the beginning of another era for Amazon.