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Amazon Expects Chaotic Q4 Despite Highly Successful Q3

Amazon reported a 37% net sales increase, to $96.1 billion, in Q3 2020, which ended September 30. However, the ecommerce giant now expects an uncertain holiday season, leading to a wide operating profit projection of between $1 billion and $4.5 billion.

A number of factors led to the uncertainty of 2020’s final quarter, according to CFO Brian Olsavsky on a call with analysts heard by CNBC. Some of the expected challenges for this period include:

  • Approximately $4 billion in COVID-19 costs driven by testing, cleaning, extending employee breaks and social distancing measures;
  • Volatile weather patterns, which have historically had a significant impact on overall holiday sales volumes; and
  • The holiday season itself, which is longer than usual (in part due to a late Prime Day) and subject to the pressures of the pandemic and both economic and political uncertainty.

“There’s a whole host of conditions that generally come to
bear in Q4,” said Olsavsky during the call. “I think the fact that COVID is
dwarfing all of those is causing a lot of uncertainty.”

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