Amazon says distraction of Olympics, Trump assassination attempt contributed to weak forecast

Amazon
is
pointing
to
an
unusually
busy
news
cycle
as
one
of
the
drivers
behind
its
weak
revenue
forecast.

On
a
call
with
reporters
following
the
company’s

second-quarter
earnings
report
on
Thursday,
Amazon
finance
chief
Brian
Olsavsky
said
one
reason
the
company
expects
a
slippage
in
online
shopping
this
quarter
is
because
consumers
are
distracted.
There’s
the
Paris
Olympics,
which
began
last
month
and
continues
through
Aug.
11,
as
well
as
the
ramp-up
to
the
U.S.
presidential
election
in
November.

Olsavsky
also
pointed
to
the

attempted
assassination
of
former
President
Donald
Trump
at
a
Pennsylvania
rally
last
month,
which
occurred
just
before
the
Republican
National
Convention.

“Customers
only
have
so
much
attention,”
Olsavsky
said.
“When
high-profile
things
happen,
or
the
assassination
attempt
a
couple
of
weeks
ago,
you
see
that
people
shift
their
attention
to
news.
It’s
more
about
distractions.”

For
the
third
quarter,
which
runs
through
September,
Amazon
said
it
expects
revenue
of
$154
billion
to
$158.5
billion.
The
midpoint
of
the
range,
$156.25
billion,
fell
short
of
consensus
estimates
of
$158.24
billion,
according
to
LSEG.
The
disappointing
guidance,
coupled
with
a
revenue
miss
for
the
second
quarter,
sent
Amazon
shares
sliding
more
than
7%
in
extended
trading.

The
chaotic
news
cycle
isn’t
the
only
factor
affecting
consumer
spending
patterns,
a
topic
that
company
executives
didn’t
even
bring
up
with
analysts
on
the
call.

One
big
issue
they
did
address
with
analysts
on
the
call
is
that
shoppers
continue
to
be
cautious
with
their
spending
due
to
economic
challenges.
CEO
Andy
Jassy
said
consumers
are
buying
cheaper
items,
meaning
there’s
a
lower
average
selling
price
(ASP)
on
products
sold.

“Customers
continue
to
trade
down
on
price
when
they
can,”
Jassy
said.
“More
discretionary,
higher
ticket
items
like
computers
or
electronics
or
TVs
are
growing
faster
for
us
than
what
we
see
elsewhere
in
the
industry
but
more
slowly
than
we
see
in
a
more
robust
economy.”

On
the
media
call,
Olsavsky
said
consumers
are
“continuing
to
be
cautious”
and
are
more
focused
on
buying
everyday
essentials,
which
helps
explain
why
Amazon
“came
in
a
little
short”
on
revenue
for
the
quarter.

Other
e-commerce
companies
have
made
similar
observations.


Wayfair

saw
a
slowdown
in
home
goods
purchases
due
to
inflation
and
a
stagnant
housing
market.


Etsy
CEO
Josh
Silverman

said
in
an
interview
on
CNBC’s
“Squawk
Box,”
following
second-quarter
earnings
on
Wednesday,
that
“it’s
a
tough
time
for
the
consumer,”
and
that
“every
industry
is
really
seeing
it.”

When
it
comes
the
the
Olympics,
Amazon’s
loss
is
NBCUniversal’s
gain.
The
company,
which
is
the
parent
of
CNBC,
said
this
week
that
it’s
hit
at
least
$1.25
billion
in
ad
revenue
from
broadcasting
the
Paris
Olympics.

“More
than
70%
of
advertisers
for
the
2024
Summer
Games
are
new,
with
nearly
half
a
billion
dollars
coming
from
first-time
sponsors,”
the
company
said
in
a

statement
on
Wednesday.

It’s
a
short-term
blip
for
Amazon,
but
one
that
Olsavsky
says
contributes
to
a
difficult
forecast.

“A
lot
of
times,
purchases
will
defer
and
you
know
people
will
come
back
and
buy
what
they
were
going
to
buy,”
he
said.

Disclosure:
CNBC
parent
NBCUniversal
owns
NBC
Sports
and
NBC
Olympics.
NBC
Olympics
is
the
U.S.
broadcast
rights
holder
to
all
Summer
and
Winter
Games
through
2032.