The uncertainty surrounding the economy is starting to impact brand names that have become synonymous with online holiday shopping - notably Amazon. Lazard Capital analyst Colin Sebastian lowered estimates for Amazon's Q3, FY 2008 and FY 2009 this morning, noting in an investor's report that, despite its gains in e-commerce market share, it is not immune to the current slowdown.
Q3 revenue and EPS estimates were lowered to $4.27 billion and 25 cents from $4.3 billion and 27 cents. FY 2008 estimates were lowered to $19.70 billion and $1.55 eps from $19.75 billion and $1.58 eps. FY 2009 estimates were lowered from $24.50 billion and $2.15 eps to $24.75 billion and $2.18 eps. From the investor's note:
According to our most recent channel checks, online spending trends remain challenging, and may have weakened further since the end of August... According to a survey from online payment services provider eBillme, nearly half of consumers are delaying purchases due to uncertainty in the economy, while 42% are planning to decrease their usage of credit cards. In addition, we believe there could be more competitive and promotional pressures at retail ahead of the holidays, beginning earlier than usual in the fall. On the positive side, we continue to believe that e-commerce growth should outpace bricks-and-mortar retail as consumers seek better values online and are now more accustomed to shopping online for the holidays.