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Amazon stock declines on Q4 earnings, e-commerce hit by consumer slowdown

Yahoo Finance Live anchors discuss quarterly earnings for Amazon.

Video transcript


- Well, the third thing to know this morning comes from another tech giant reporting earnings, that is Amazon. The company announced a mixed bag for its fourth quarter. Total revenue came in above expectations, but missed when it came to online store sales as they were hit hard by a consumer slowdown. We're going to dig into it more later as well with the cloud unit. AWS saw slowing growth. That was also a problem.

But I am intrigued by what is happening at the online stores as well because a lot of the analysts' commentary I saw, a lot of it was positive, even though we saw that weakness in online store sales that came in below estimates. Most of the analysts' commentary I saw said it held up pretty well. There were a couple who said it didn't. And so, I'm like these people are all looking at the same numbers. And yet, the interpretation was quite different for, in particular, that 2.3% drop.

- Yeah. I just think if you're trying to get a good read in on the consumer and trying to look across where products are being taken on by individuals and households, you can look no further to Amazon's miss on this online segment, selling less than expected, and the $64.53 billion compared to that $65 billion. So slight miss there.

And then you want to draw through line another one that's supporting data from Apple as well. Miss on product there. And so consumers right now are being extremely value-conscious about how they're spending their dollars and where they're spending them, even if there are deals to be had on the deal factory that is Amazon and the Prime membership as well.

- And since it's Friday, I'll touch the third rail. Let's not lose focus on the fact that Amazon CEO, Andy Jassy, was on this earnings call. Now, he mentioned on the call yesterday just passed his one year mark that he also noted that he would likely try to hop on the earnings calls a little bit more.

I think Andy is starting to feel some pressure. The stock has not done well under his leadership, whether whatever. If that's just the COVID unwind, whatever it is. The stock has not been doing well. The capacity that, in many respects, he helped build during the pandemic, it worked then. But now, they're having to unwind it. They're having to lay off workers. I think he's facing some increasing heat, as he should.

- I mean, on the flip side of that, the stock, like the rest of the tech sector, has rebounded this year. It's up 34%. So it's right in there. It hasn't really lagged competitors. And again, when you go to a couple of other bright spots here when we talk about when I was mentioning that analysts are more positive on the retail sales, Brian Nowak, for example, over at Morgan Stanley mentioned a steep improvement in retail profitability. So even though the revenue might have missed, maybe profits in that area are going a little better. One other thing that stood out to me, physical stores, i.e. Whole Foods--

- Love Whole Foods.

- --came in above estimates, up 5.7% at $4.96 billion. And that's a group that has not necessarily been working so well.

- I'm excited about Whole Foods. I just found out recently they do $1 oysters on Friday. I had no idea this was happening.

- Oh yeah. you've been touting this to me.

- I thank them for doing this. So obviously, that's probably an operating margin hit to Amazon, but I'm OK with it.

- So we know what you're doing tonight.

- That's what I'm doing.

- $7 oysters at Whole Foods though, that gives you a sense of the type of consumer that they're continuing to go after. The consumer that says, all right, whole paycheck? No problem.

- You can't get any because you have to be a Prime member. No, I'm just kidding. Actually, they're free.


- Well, you know what? I'll go to Eataly. Eataly, you got me.

- So here's the big question before we leave it.

- I'm eating alone.

- Well, that was going to be my second question. The biggest question is, do you pair them with champagne or vodka? Which way do you go?

- It's a good question. Might be a Red Bull tonight. All right, thanks so much, Julie.