Amazon reported a fall in quarterly operating income.

The e-commerce giant has not seen inflation change consumer behavior. 

Amazon pointed to progress in the efficiency of its fulfillment network.










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Considering some rough signals this week from Walmart, Shopify, and Best Buy, the news could've been a lot worse from Amazon's latest quarterly earnings report.
Sure, the company pointed late Thursday to spiraling costs in fuel, energy and transportation as the main culprit in pushing its latest operating income down to $3.3 billion from $7.7 billion.
But Amazon also said its customers are unfazed by inflation, a stark contrast to Walmart which recently warned that consumers are changing their buying habits as prices surge. Amazon also said it's making progress on "controllable costs" — namely, the productivity of its massive fulfillment network.
As a result, Amazon was still able to see second-quarter sales grow nearly 8% to $121.2 billion, beating Wall Street's expectations. Even more importantly perhaps, Amazon's forecast for third-quarter sales called for growth to $125 billion to $130 billion, safely bracketing analysts' expectations. 


The company's stock was up more than 10% in after-hours trading.
Here are some takeaways from the company's conference call with reporters on Thursday:
Unlike Walmart, Amazon hasn't seen consumer behavior change in response to inflation, Chief Financial Officer Brian Olsavsky said.
Amazon saw $4 billion in extra costs in the second quarter due to inflation and overexpansion. That's down from $6 billion in the previous quarter. The improvement comes almost entirely from a reduction in Amazon's warehouse staff — inflation and warehouse overcapacity are still issues, Olsavsky said. The company sees a major improvement next quarter, to $1.5 billion in extra costs, as it expects to have used much of its extra warehouse space by then.
As Insider previously reported, Amazon is questioning its pace of hiring for headquarters roles. Olsavsky said the company likely won't hire at the same pace as previous years, but will continue hiring for some targeted engineering roles, and for AWS and advertising.

Do you work at Amazon? Got a tip? Contact the reporter Katherine Long via the encrypted messaging app Signal (+1-206-375-9280) or email (klong.com).

Source: Business Insider

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