Amazon’s new boss is facing a sales slowdown as the breakneck pace of expansion fuelled by stay-at-home shopping eases.
Andy Jassy, who took over from founder Jeff Bezos earlier this month, saw shares fall 7% in after-hours trading as his first set of results as chief executive revealed revenues short of Wall Street expectations.
Second quarter sales at the online retail giant rose 27% compared with a year ago to $113.1bn while profits rose 48% to $7.8bn.
But the sales figure missed analysts’ estimates of around $115bn and growth was down from 44% in the first quarter.
A forecast for the current July-September period pencilled in revenue growth of no more than 16%.
Amazon also pointed to a profit range which will be lower than the third quarter a year ago.
The company’s finance chief Brian Olsavsky said it faced tough comparisons with 2020 when many consumers were stuck at home and reliant on e-commerce.
In the US and Europe, people were now out and about “doing other things besides shopping,” he said, adding that he expects the lower pace of sales of growth to continue over the next few quarters.
It comes as new boss Mr Jassy tries to get to grips with a sprawling empire that now encompasses a cloud computing division, store chain network Whole Foods, a new healthcare business, and a film and TV arm that is in the process of buying MGM studios – on top of the core retail operation.
During the pandemic, Amazon ramped up its growth, building the number of members of its Prime subscription service – which offers quicker deliveries as well as video streaming – to more than 200 million and recruiting over 500,000 workers to keep up with surging demand.
In North America, its biggest market, net sales climbed by 43% in the second quarter of last year as lockdowns first took their toll.
A year later, sales were still rising strongly, but by 22% – half the pace.
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “Amazon is increasingly bumping up against the law of large numbers – particularly in US retail.
“When you’re only selling $1,000 of product a year, boosting sales by 40% is easy.
“When your annualised sales reach $400bn, finding an extra $160bn of sales is pretty difficult.”
Amazon results come at the end of a busy period of earnings statements that have revealed contrasting fortunes for America’s tech giants as pandemic restrictions draw to an end.
But elsewhere, Netflix has seen subscriber growth slow after last year’s record additions.