Amazon shares fall as they disappoint with third quarter sales forecast
Amazon.com’s forecast for third-quarter sales missed Wall Street expectations on Thursday, as consumers return to physical stores after buying more online in the past year due to the pandemic.
Shares of Amazon, which is just $ 170 billion (€ 143 billion) away from joining the $ 2,000 billion (€ 1.68 billion) market capitalization club, fell by 5% in extended exchanges.
The company expects sales for the current quarter to be between $ 106 billion (€ 89 billion) and $ 112 billion (€ 94.2 billion), growing between 10 and 16%.
Analysts were expecting $ 118.90 billion (100 billion euros), according to IBES data from Refinitiv.
The rapid roll-out of vaccines and the easing of restrictions have led consumers to venture into stores, while adapting new modes of purchase such as click-and-collect, competing with rapid delivery services for online orders provided by Amazon and its peers.
The company also reported a rare lack of quarterly sales, amid competition from retailers such as Walmart and Target who have ramped up their online business over the past year.
Harmful Medicinal Ingredients
Amazon’s net sales reached $ 113.08 billion (95.13 billion euros) in the second quarter ended June 30, from 88.91 billion dollars (74.8 billion euros), a year earlier. Analysts were forecasting an average of $ 115.20 billion (€ 96.9 billion), according to IBES data from Refinitiv.
Earlier, it emerged that the United States Food and Drug Administration (FDA) informed Amazon.com of the sale of sexual enhancement and weight loss products containing potentially harmful drug ingredients, in a letter to the new boss of the company, Andy Jassy.
The FDA had previously warned consumers in December to avoid male enhancement and weight loss products sold through Amazon, eBay and other retailers, citing hidden dangerous drug ingredients.
In a letter dated July 26, the FDA said it tested dozens of products purchased from December 2019 through February 2020 and found that they contained one or more of the drug ingredients sildenafil, tadalafil, and vardenafil.
None of these ingredients have been named in product labeling, the health regulator said.
Sildenafil, Tadalafil, and Vardenafil are active ingredients in FDA-approved prescription drugs, Viagra, Cialis, and Levitra, which are used to treat erectile dysfunction.
These ingredients could interact with certain prescription drugs and lower blood pressure to dangerous levels, the FDA said.
“We continue to find potentially dangerous products available for purchase and urge stores, websites and online marketplaces, including Amazon, to do more to protect consumers by not selling or facilitating the sale of Potentially dangerous and illegal FDA-regulated products, ”the health regulator said on Twitter Thursday.
In one case, the FDA said it purchased a product from Amazon’s website that the company previously said it restricted, adding that it was concerned that the e-commerce site’s filters were inadequate.
The FDA has asked Amazon to submit a written response within 15 business days on the steps it has taken to address these violations. – Reuters