Shares of Amazon (NASDAQ: AMZN) closed down 14% on Friday after the company shared a revenue outlook for the current quarter that was below Wall Street’s estimates. It’s Amazon’s worst day since July 2006.
Amazon said Thursday it forecast revenue between $116 billion to $121 billion in the second quarter, trailing the $125.5 billion average analyst estimate, according to Refinitiv.
The firm’s operating expenses are soaring in contrast to its sales. Amazon invested heavily to staff up its warehouses and combat supply chain challenges, and it now faces rising inflation, as well as increasing transportation and labor costs.
The second-quarter forecast suggests revenue growth could plummet to around 3% to 7% compared to last year, suggesting a continuous slowdown from the first quarter, when revenue at Amazon surged by 7%.
Amazon also lost about $3.8 billion in the first quarter, compared with a profit of $8.1 billion a year ago. The company’s investment in electric vehicle maker Rivian weighed on its profits.