Even Amazon Is Banking On Diwali: Misses Estimates, Blames Change Of Festival Calendar For Lacklustre Global Performance

Though Amazon posted record profits in its third quarter earnings reports on Thursday (25 October), the shares of the global giant still went tumbling down by around 8 per cent in after-hours trade, as reported by Reuters. The reason for this thumbs down from Wall Street was its dismal forecasts for the holiday season, which was lower than the estimates of analysts.

While the analysts blamed disappointing sales in international markets and increasing competition in markets like India, Amazon’s executives noted that change in accounting practices and conservative outlook as the reasons for missed estimates. There is reportedly some truth to analysts claims since the international sales only grew by 13 per cent, which is less than half of last year’s 29 per cent.

The company’s CFO, Brian T. Olsavsky, told shareholders that Amazon expects a better Q4 due to change of the Diwali calendar in India. “There’s also material change in the Diwali calendar in India. About half of our Diwali sales last year were in Q3. This year they’ll be fully in Q4. So those are a couple of factors that hit the international growth area in particular,” he noted.

On 4 September 2018, Amazon reached the historic milestone of $1 trillion in market cap, following Apple. Competition for Amazon is increasing as Walmart, its principal rival in the US, entered the Indian market through its acquisition of Flipkart for $16 billion.