Just three months ago, the world's largest online retailer
posted the biggest profit in its 26-year history. Governments'
stay-at-home orders prompted consumers to shift purchases to web
marketplaces such as Amazon, while brick-and-mortar rivals
shuttered shops.
Amazon has reaped rewards from this but not without challenges.
For a time, Amazon limited its warehousing services to essential
goods. The company re-fashioned operations for COVID-19
precautions, though more than 19,000 workers caught the virus -
and some demanded site closures. Customers experienced
slower-than-usual deliveries.
Some analysts, including Colin Sebastian of Baird Equity
Research, want to know if Amazon can manage such challenges
while demand climbs with fourth-quarter holiday shopping. The
company typically addresses such questions during an analyst
call after its financial report.
"Do they have the logistics and delivery capacity to handle
order volumes?" Sebastian asked.
Michael Pachter, of Wedbush Securities, cited anecdotes about
recent warehousing constraints for certain larger items. "I
think you're going to have a disastrous fourth quarter in terms
of demand overwhelming them once again," he said.
Amazon has long worked to avoid a repeat of the 2013 season when
delays left some without gifts on Christmas Day. The company now
handles more deliveries in house, and this year it moved its
marketing event Prime Day - usually in July - to October,
letting shoppers place holiday orders early.
Pachter said, "They wanted us to start thinking 'holiday' now,
before the crazy rush that begins Black Friday."
The extra weeks of shopping may translate into additional sales,
with higher-income households offsetting those with depressed
budgets for holiday spending.
Analysts on average expect revenue of $92.7 billion for the
just-ended third quarter, according to IBES data from Refinitiv.
(Reporting by Jeffrey Dastin in San Francisco; Editing by Greg
Mitchell and Lisa Shumaker)
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