Most retailers cited challenges and declining traffic for the holiday season, but it's unclear whether the pain of Target, Best Buy and a host of others translated into big gains for Amazon.
Amazon will report its fourth quarter results on Thursday and most analysts expect a solid quarter from the e-commerce giant. Certainly, Best Buy noted that Amazon forced retailers to cut prices. Yet, many retailers also noted big e-commerce gains.
Did Amazon take enough share to post big enough gains to satisfy Wall Street? The answer to that question could be sticky.
Wall Street is expecting Amazon to report non-GAAP fourth quarter earnings of 67 cents a share on revenue of $26.05 billion.
Wedbush analyst Michael Pachter highlights the eternal Amazon conundrum:
We expect Amazon to report Q4 revenue well above consensus and our estimates as it continues to gain share from brick-and-mortar retailers; however, EPS remains unpredictable as the company’s spending soaks up gross profit dollar growth.
The data from Amazon indicates the company did well. Amazon announced its best-ever holiday season and said marketplace sellers also hit records.
However, e-commerce activity may have also slowed along with overall retail sales. eBay's fourth quarter showed U.S. e-commerce slowed sequentially and Europe remains sluggish.
Add it up and Amazon's results aren't likely to deliver a massive zero-sum retail victory. Traditional retailers that have focused on multi-channel sales have also gained from a shift in e-commerce. Janney Capital Markets analyst Shawn Milne said in a research note:
When the dust settles, we believe the results will clearly underscore the massive eCommerce share shift driven by rapidly changing consumer behavior including mobile and omni-channel. This is not to say the shift only benefits online retailers – clearly those retailers that are embracing omni-channel are participating in the share shift.