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Amazon CFO Brian Olsavsky says the volatile news cycle is partly to blame for its lower than expected sales forecast for the quarter.
On Thursday, the e-commerce giant said it was expecting $154 billion to $158.5 billion in revenue for the third quarter of this year, below the average analyst estimate of $158.24 billion. Amazon stock prices fell by more than 7% in after-hours trading.
"On the revenue side, I'd just say it's going to be a tough quarter to forecast," Amazon CFO Brian Olsavsky told The Wall Street Journal's Sebastian Herrera during a press briefing on Thursday.
"There's a lot of events that are occupying people's attention right now from political conventions to the election itself to the Olympics," he continued.
Olsavsky later told Axios' Hope King in the same briefing that the spate of newsmaking events in the recent and coming months meant that it would be much harder for Amazon to sell to customers.
"No matter what you're selling or providing, customers only have so much attention," Olsavsky said.
"When high profile things happen, or the assassination attempt a couple of weeks ago, you do see that people shift their attention to news, and so it's more about distractions," he continued, referencing the failed attempt on former President Donald Trump's life during a Pennsylvania rally last month.
"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 added.
To be sure, dealing with a wild news cycle isn't the only problem on Amazon's plate.
In addition to issuing a weak revenue forecast, the company also said it missed sales estimates in the second quarter of 2024.
According to Olsavsky, the dip in sales was driven by a shift in consumer behavior, with people opting to be more frugal with their spending.
"We are seeing cautious consumers, they're looking for deals, they're trading down to lower ASP (average sales price) options when they can, and that hasn't changed," Olsavsky said, adding that the shift resulted in brisk sales for Amazon's lower-priced Everyday Essentials business.
"So far us, the volume of units sold actually accelerated slightly when you adjust for the leap year effect in Q1," he added. "It's just right now a lot of the traction is to lower ASP products and that is impacting the revenue growth a bit."
