As a company that started in one country and expanded to many, Amazon has always been at the forefront of innovation. With its roots in books, Amazon was among the first to provide low-cost e-learning opportunities for people around the world. It’s since branched out into cloud computing and artificial intelligence, with one of its largest expansions coming through its acquisition of Whole Foods last year.
But that seems all from past now as it is clear that things are not going well for Amazon currently. After reporting a sharp decline in profits against expectations on Thursday, September 27th, the world learned just how much pressure the company is under these days.
The results were a sharp reversal for the company, which has been bullish on its future. However, after the results were released at around 7:45 AM Thursday morning in the U.S., they dropped to $181.74 per share, down over 40% from around $272.76 per share when it reported quarterly earnings in July.
In fact, some analysts noted that Amazon’s core online retail business was already declining at a rate of 1% when it reported profit in July, with that decline accelerating after they issued their earnings report on Thursday — an indication of how much of a disappointment growth has been for them.
Complicating matters even more, Amazon’s stock is now trading at a lower price than it was when they went public all the way back in 1997. In fact, the company might be on track for its worst year since then.
Things have gotten so bad that analysts are now saying that Amazon has been valued so low due to poor execution and the fact that it has lost several of its executives in recent months.
For those who follow trends and developments in the consumer retail industry, these trends are not entirely surprising. After all, Amazon is known for coming up with innovative ideas and cutting out middlemen wherever possible.
The problem comes when it is time to scale up, and that’s where Amazon has run into serious problems. Even though they have come up with some great ideas in the past, Amazon hasn’t always been able to fully capitalize on them.
For example, the company talked about its pending acquisition of Whole Foods last year and how it would work to speed up delivery and improve customer service — two things that Whole Foods needs badly. But even though the acquisition was completed in August 2017, the results are not yet in for the e-commerce giant.
It’s possible that Amazon could recover from this decline through new sales opportunities and improvements made in its core operations — but so far, their results have suggested otherwise.
