Here Is How Amazon's Ugliest Quarter In Years Looked Like In Six Charts

Just when we thought "the world's marketplace" Amazon couldn't possibly report any uglier quarterly numbers, it goes and proves us wrong. First, it reported an EPS loss of $0.27, vs the $0.15 expected as a result of ($126) million in Net Income. The operating loss was "only" $15 million compared to an expectation of $64 million, however this appears the result of pulling forward wales into Q2 since the Company also announced that the Q3 operating loss would be a whopping $410-$810 million, what would be the biggest operating loss in years. That this will happen even as AMZN expects net sales to grow between 15% and 26% from a year ago to $19.7 - $21.5 billion is truly disturbing.

As to what is really going on with the business, the following charts should explain it all, starting with perhaps the most important one of all. In Q2, AMZN's LTM Operating Margin just dropped to 0.8%, quite possibly the lowest print since Lehman if not before.


Not only is Amazon growing sales, it is also growing its army of part-time workers, which in Q2 rose to a record 132,600, up a massive 37% from 97,000 a year ago. However, no such luck for the company's global net sales growth, which just dipped back to 22%: the lowest number in recent history.


Thos curious how the company's business is doing on a net and operating income basis in the last 4 years, here is the answer.


An uglier picture is revealed when looking only at the all important operating margin: at 0.1% in Q2, it was only the 3rd time AMZN has had a negative quarterly margin since Lehman.


To avoid the confusion of seasonality, we show just Q2 in the past five years. The Operating and Net Income trends are clear.


But by far the worst trend is that in operating margin. It needs no commentary.


* * *

Remember, it's all the snow's fault: none of the above has anything to do with the state of the US consumer.