When Andy Jassy took over as Amazon.com Inc. AMZN CEO on July 5, 2021, many speculated if he would be able to run the e-commerce giant as effectively as his predecessor, founder Jeff Bezos.
One year later, many of those speculations have come true as Amazon's stock price continues to fall.
How Did Amazon Perform During Jassy’s First Year: Amazon’s stock price and financials have been sub-par this past year. On July 5, 2021, Jassy's first day at the helm, the stock price was $185.97 per share.
Today, it opened at $107.63 per share. By 3 p.m. EST, the stock hovered at around $113.56 per share.
During Jassy’s tenure, the stock fell 73.05 points and lost 39% of its value. The decrease is based on the company’s poor financial performance for the last calendar year.
In Jassy’s first fiscal quarter, which was Amazon's third quarter (Q3) for 2021, the company’s gross profit decreased by about $2.4 billion and net income decreased by more than $4.6 billion.
"We’ve always said that when confronted with the choice between optimizing for short-term profits versus what’s best for customers over the long term, we will choose the latter," Jassy said during an earnings call at the time.
Although Amazon experienced heavy losses in during Q3, it will reap the benefits in the long term, he added. The Seattle-based company rallied in Q4 as gross profit grew more than $1.8 billion and net income increased $11.2 billion.
Jassy, and company analysts, credited the growth to a boom in sales during the holiday shopping season. While the future looked bright for Amazon amid a slowing economy, the scenario changed during first quarter of 2022.
The company lost almost $2 billion in gross profit and more than $18 billion in net income. It now has a negative income of –$3.844 billion.
Benzinga’s Outlook: For now, Amazon, Target Corporation TGT and Walmart Inc. WMT are in a similar situation. As the economy and consumer spending slows, it will continue to get worse for Amazon before it gets better. Inflation continues to rise and families are less likely to spend money on non-essential items that Amazon provides as groceries continue to become more expensive every month.
The future looks grim for the online retail giant and a new strategy is needed to help the company get through the impending recession.
Photo: Courtesy of Christian Wiediger on Unsplash
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