Economic uncertainty is proving to be a hindrance to even the largest retailers. Amazon has posted projected growth ranging from 2% to 8% for Q4 2022, and the disappointing numbers caused its share price to drop more than 10% as of the morning of Oct. 28. The ecommerce giant’s modest outlook added to the general downturn other tech titans like Meta and Microsoft are experiencing, though Apple’s outlook was a bit cheerier.
Amazon’s net sales for Q3 2022, which ended Sept. 30, grew 15% to hit $127.1 billion. This was slightly lower than the $127.5 billion analysts reportedly expected, according to Reuters. Sales for Q4 are expected to reach between $140 billion and $148 billion. The pressures weighing on Amazon are the same as those being felt across retailers of all sizes worldwide, and not even a record-setting Prime Day was enough to offset them completely.
“While we are encouraged by our progress across the business, the macroeconomic environment remains challenging worldwide,” said Brian Olsavsky, CFO of Amazon during a call with investors. “The continuing impacts of broad-scale inflation, heightened fuel prices and rising energy costs have impacted our sales growth as consumers assess their purchasing power and organizations of all sizes evaluate their technology and advertising spend.”
But the retailer had some good news as well. Olsavsky noted that the factors negatively impacting in-stock rates and delivery speed started to ease throughout the quarter. However, signs of slowing growth rates were already showing, leading to the lower-than-expected growth projections.
The year has been a difficult one for tech-focused companies in general. Meta’s share price fell below $100 as of Oct. 28, putting it down by more than 68% year-over-year. Alphabet has been wavering back and forth around the $100 mark for several months with its share price down 35% year-over-year. Microsoft fared better but has still been impacted, leading to a decline of more than 27% year-over-year.
However, Apple is a bright spot for the industry. While the retailer hasn’t provided exact guidance since 2020 due to continued uncertainty, the company confirmed that revenue growth would fall below 8% in December. This caused an initial dip following the announcement on Oct. 27 but its share price recovered the following day.
This may have been partially due to news that iPhone sales set a record for Q4 2022, which ended September 24. Sales of the device rose 10% year-over-year to $42.6 billion, exceeding expectations.
“Customer demand was strong and better than we anticipated that it would be,” said Tim Cook, CEO of Apple during a call with investors. “And keep in mind that this is on top of a fiscal year of 2021 that had iPhone revenue grow by 39%, so it’s a tough compare as well. And so we were happy with it.”