Amazon just reported its third quarter earnings for 2022. | Illustration by Alex Castro / The Verge
Amazon’s sales finally picked up in the third quarter following three consecutive quarters of single-digit growth, according to the company’s earnings released Thursday. But it’s expecting a tighter holiday season amid an uncertain economic environment, and the company’s stock fell more than 4 percent in after-hours trading.
Sales hit $127.1 billion last quarter, up 15 percent year over year. That number was likely buoyed by Amazon’s successful Prime Day event in July, which it has called its “biggest Prime Day event ever.” Despite that growth, the company is predicting a slower holiday season. In its guidance, Amazon said net sales should grow between 2 and 8 percent year over year next quarter; last year, Amazon saw 9 percent growth in the fourth quarter. It seems particularly unsure about operating income, which the company estimates will land “between $0 and $4.0 billion,” compared with $3.5 billion in the same quarter last year.
To counter those trends, Amazon is working to keep costs down, according to a lengthy statement by CEO Andy Jassy. The company is seeing “steady progress” in lowering costs in its fulfillment network and has “a set of initiatives that we’re methodically working through that we believe will yield a stronger cost structure for the business moving forward,” Jassy said. He also promises that the company will “balance” investments to “be more streamlined” without compromising its long-term bets.
Q3 was a busy one for Amazon. In addition to Prime Day, the company revealed a whole slew of new devices, released its extremely expensive Lord of the Rings TV show, and announced the blockbuster acquisitions of robot vacuum maker Roomba and healthcare provider One Medical. Warehouse workers in Albany filed to unionize in August but voted down the union earlier this month. And it kicked off its 11-year run of exclusive Thursday Night Football broadcasts in September.
Amazon has already had a big October, which could affect the holiday quarter’s results. The company hosted its second Prime-focused sale of 2022, the Prime Early Access Sale, but it may not have given Amazon as much of a boost as it wanted given the low guidance. The company also announced that it was giving up on the Glow video calling device and the online fabric store Fabric.com. And reports indicate that Amazon has curbed corporate retail hiring for the rest of the year.