E-commerce giant Amazon (AMZN) is expected to sell $12 billion in merchandise at its Prime Day event this week, helped by discounts and improved logistics, Bank of America analysts wrote.
Key Points to Remember
- Amazon's Prime Day is expected to generate $12 billion in gross market value (GMV), BofA said.
- That figure would represent 7.4% of Amazon's GMV ;Amazon in the third quarter, compared to 7.2% last year.
- This is the first such event since Amazon's transition to regionalized logistics.
Amazon Prime Day is a 48-hour period of deals exclusively for Amazon Prime members, and this year's event will take place on Tuesday and Wednesday. Amazon said customers will have access to “more deals than any Prime Day in the past”, while there will also be an early opportunity to take advantage of Prime Day deals with third-party merchants. that host a “Buy with Prime”. 34; check. New Prime members will get an extended 30-day free trial, plus a $10 shopping credit.
For Amazon, Bank of America expects Prime Day to generate $12 billion in merchandise value sold, or 7.4% of banks' expected $162 billion in gross merchandise value (GMV) in the third trimester. That would be up from last year's GMV of 7.2% for the quarter and analysts forecast Prime Day sales growth of 10% year-over-year.
BofA also expects the Prime Day event to have a slight negative effect on daily sales in the days leading up to and following the event. However, Amazon noted that customers are more cost-conscious in the current environment, while a RetailMeNot survey said consumers plan to spend $250 on summer sales, versus $388 in 2022 and $594 in 2021.
Amazon said in its first-quarter earnings release that it expects to have its “fastest Prime Day delivery speeds ever” this year. BofA also noted that this will be the first year with a regionalized logistics network. The investment bank maintained a buy rating on Amazon shares, predicting 10% growth for GMV in the second and third quarters.
Management guidance for the upcoming second quarter earnings release is for net sales of $127 billion to $130 billion, up 5-10%. Even though Prime Day often drags the company's stock price down, Amazon stock has returned 54% to investors year-to-date, outperforming the S&P 500 Consumer Discretionary sector. almost 32%./>
Andy Jassy, Amazon's CEO told CNBC the retail giant “still has a lot of growth” ahead of it. Jassy cited the potential for physical retail and computer storage to continue to move online as key growth drivers for Amazon.
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