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Amazon issued weaker-than-expected sales guidance for the upcoming quarter, not because of production delays or other business factors, but because of the news cycle.
“There’s a lot of events that are occupying people’s attention right now from political conventions to the election itself to the Olympics,” chief financial officer Brian Olsavsky told reporters after the company reported second-quarter earnings Thursday. “No matter what you’re selling or providing, customers only have so much attention.”
The Summer Olympics run from July 26 to Aug. 11, and have drawn tens of millions of U.S. viewers a day. Olsavsky also pointed to the assassination attempt on former President Donald Trump as another “high-profile” event that forces people to shift their attention to the news.
“A lot of times purchases will defer, and people will come back and buy what they were going to buy, and other times that won’t happen,” he said.
The e-commerce giant lowered its net sales guidance to $154 billion to $158.5 billion for the third quarter of this year — growth of 8% to 11% from a year earlier, but falling short of Wall Street estimates. The company’s shares were down nearly 10% in pre-market trading Friday following the report.
This forecast incudes the more than $14 billion it caught from bargain-hunting shoppers during Prime Day, Amazon’s 48-hour sales event (which took place on July 16 and 17 this year) that includes big sales on everything from electronics, to clothes, to household goods.
Its second-quarter performance was also weighed down by what Olsavsky referred to as “cautious consumers.” Amazon reported revenue of $148 billion for the quarter, short of the $148.7 billion expected by analysts, according to estimates compiled by FactSet.
On its cloud computing side, however, Amazon boasted an expected surge that would put it ahead of its competitors, including Microsoft and Google. Chief executive Andy Jassy said in a call with analysts Thursday that AWS has launched more than twice as many machine learning and generative AI features into general availability than all the other major cloud providers combined over the past 18 months.