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Amazon.com Inc. is scheduled to release its second-quarter earnings after the market closes Thursday. Here’s what you need to know:
EARNINGS FORECAST: Analysts polled by Thomson Reuters expect Amazon to earn $1.42 per share excluding certain items, compared with unadjusted results of $1.78 per share a year ago. The online retail giant forecast operating income of between $425 million and $1.07 billion, compared with $1.28 billion a year ago.
REVENUE FORECAST: Quarterly revenue of $37.18 billion is forecast by the analysts, compared with $30.4 billion a year ago. Amazon said it expected sales of between $35.25 billion and $37.75 billion for the quarter.
WHAT TO WATCH:
WHOLE FOODS: Expect analysts to ask Amazon about its plans for its $13.7 billion acquisition, including debt, of Whole Foods Market Inc. WFM -0.13% and how it might financially affect the online retailer. Plenty of speculation has swirled around how Amazon might use its new brick-and-mortar component, from delivery hubs to collecting customer data. In any event, the acquisition is likely to change the dynamics of Amazon’s revenue mix and profitability—Whole Foods’ operating margins, at 5.5%, are higher than those of Amazon’s North American retail business at 3%, Citi analysts noted at the time of the deal. Also, while online groceries have yet to take off for any player, the deal makes the Seattle-based retailer a major force in food overnight.
BRANDS: Dynamics between Amazon and brands are shifting dramatically, as demonstrated by two major brands’ recent decisions to sell their products directly to the retailer: Nike Inc., a longtime holdout that capitulated in exchange for better policing of the third-party marketplace, and Sears Holdings Corp.’s Kenmore line, marking Amazon’s first foray into directly selling major appliances. The company is continuing to expand rapidly to fit its ambitions, building new warehouses and raking in third-party seller fees. Executives may share some of their thinking on what these changes mean for Amazon’s future plans.
Amazon just reported its second quarter earnings Thursday after the bell.
It's a beat on revenue but a huge miss on earnings. Amazon stock is down around 2% in after hour trading.
Here are the most important numbers:
EPS: $0.40 per share vs. $1.42 per share expected, according to consensus estimates from Thomson Reuters
Revenue: $38.00 billion vs. $37.18 billion expected, according to Thomson Reuters
Amazon Web Services (AWS) revenue: $4.1 billion vs. $4.08 billion expected, according to FactSet
There's been a lot going on at the company. Amazon announced its deal to buy Whole Foods for $14 billion last month. The company has also purchased Souq.com, one of the largest e-commerce shops in the Middle East, in March. It's also looking seriously at the health industry: CNBC reported that the company is exploring opportunities in health care technology and pharmaceuticals.
Amazon's cloud business, Amazon Web Services, continues to be the company's fastest-growing and most profitable unit. Wall Street expects AWS to post $4.08 billion in revenue, up 41 percent year-over-year.
The results come as Amazon CEO Jeff Bezos just surpassed Microsoft cofounder Bill Gates to become the richest person in the world. Amazon's stock has been on an absolute tear over the past two years, nearly doubling in price in that period.
Amazon continues to expand internationally, rolling out Prime and other services in new regions. It just announced the launch of a new Prime Now service in Singapore on Thursday.
I wonder if someone knew something ahead of time. Right at noon until about 1:38, the nasdaq fell 136 points (-2.11%), the S&P fell 22 points (-0.89%), and AMZN fell $41.33 (-3.82%)
Declines began around midday and weighed on the Nasdaq Composite
July 27, 2017
Technology stocks slid abruptly Thursday, pulling the S&P 500 away from record territory.
The declines began around midday and accelerated, sending technology stocks sharply lower and weighing on major indexes. The moves marked a reversal from the morning, when technology stocks led gains in broader indexes.
The Nasdaq Composite, which is heavily influenced by tech giants including Facebook , Google and Microsoft, as well as biotechnology firms, slid 0.8%.
The S&P 500 tech sector fell 1%, with Advanced Micro Devices , Nvidia and Adobe Systems posting among the steepest declines.
Blue Apron earnings: First report caps tumultuous post-IPO period
Aug. 9, 2017
Since it went public in late June, Blue Apron Holdings Inc. has been hammered by competition from sector-destroyer Amazon.com Inc., lost its chief operating officer and seen its stock plunge after misleading reports of layoffs, all leading to the company being the worst-performing large initial public offering so far this year.
With that in mind, the meal-kit company is going to report its first earnings as a public company Thursday morning, which could help stem the tide of negative news, or if customer acquisition costs and retention do not improve, make it worse. Blue Apron has to prove to investors that the company’s business model is sustainable, after the company’s prospectus showed that the company had nearly tripled its marketing expenses between 2015 and 2016 to attain new customers.
“I think investors want to see that Apron can pare back some of its heavy marketing spending without sacrificing growth/new orders,” said Matthew Kennedy, an analyst at Renaissance Capital, a manager of IPO-focused ETFs.
The marketing expenses also suggest that the company’s customer-acquisition costs have increased, even though Blue Apron has yet to break out the exact current number. So far, the company has said it has an average customer acquisition cost of $94 from 2014 to the first quarter for 2017, but has not shown its growth over time.
Investors will be looking for a more exact number, and a breakdown of Blue Apron’s customer numbers to get a sense of whether the company can withstand Amazon, which has begun piloting its own meal-kits and already has a built-in customer base. At the very least, the earnings call should give Blue Apron’s executives a chance to communicate the company’s competitive advantage, which is a move experts have been calling for as a way to lessen the impact from Amazon.
Here’s what to expect when Blue Apron reports second-quarter earnings Thursday morning:
Earnings: Analysts surveyed by FactSet expect Blue Apron to report a loss per share of 27 cents. Estimize, a software platform that uses crowdsourcing from hedge-fund executives, brokerages and buy-side analysts to predict earning, does not yet have estimates for the stock on the platform. Genji Shikama, director of data and support at the company, said they may wait a quarter or two before initiating coverage, noting that the company only has a 12-month runway, according to the prospectus.
Blue Apron recorded a loss per share of 77 cents in the first quarter of the year, according to FactSet.
Revenue: The FactSet consensus is for revenue of $235.8 million. Blue Apron recorded revenue of $244.8 million in the first quarter, according to FactSet.
What else to look for
Beyond the Amazon effect, some analysts have remained skeptical on the overall subscription box model. Customers seem to want to try out the service, but then don’t stay, which means Blue Apron either has to get a loyal base that spends more or diversify its revenue stream, adding in more products.
However, those who are bullish on the stock say that the company’s unique recipes as well as its close and sometimes exclusive relationships with farmers and livestock producers will keep customers coming back.
Additionally, they say Blue Apron may be able to better compete with Amazon as it scales up its operations by automating its warehouses, which will also allow it to offer customers more meal choices. That automation may lead to more questions how many Blue Apron factory workers will remain with the company, especially after confusion on the move to a new factory.
Other personnel questions include the company’s search for a new chief operating officer, after co-founder Matthew Wadiak announced that he was stepping down less than a month after the company went public.
Ticketmaster Parent Live Nation's Stock Swings To Loss After Report Amazon Interested In Live-event Ticketing
Aug. 10, 2017 4:18 p.m. ET
Shares of live event company and Ticketmaster owner Live Nation Entertainment Inc. took a negative turn in afternoon trade after a Reuters report that Amazon.com Inc. was seeking partners to launch into live-event ticketing.
Shares of Live Nation, which had been up 12.5% from Wednesday's close after posting positive second-quarter earnings, swung to a more than 3% loss before bouncing back. Live Nation's Ticketmaster is the juggernaut in the live event ticketing landscape.
Ebay Inc., which owns StubHub, swung to a 3% loss after the report.
Amazon to Cut Prices at Whole Foods in New Strategy for Retailer
Move is first of several changes Amazon.com plans to make at its latest and biggest acquisition
Aug. 24, 2017
Amazon.com Inc. said it would begin slashing prices on grocery staples at Whole Foods Market Inc. on Monday, the first changes the online retailer plans for its $13.7 billion acquisition.
Amazon also said it would introduce a customer-rewards program at Whole Foods and new deals through its Prime membership program. Amazon added that it plans to close its acquisition of Whole Foods on Monday.
“We’re determined to make healthy and organic food affordable for everyone,” said Jeff Wilke, CEO of Amazon Worldwide Consumer.
Shares of grocery store companies fell in response to Amazon’s planned price cuts, which will affect a range of items from bananas to beef. Kroger Co., Wal-Mart Stores Inc. and Costco Wholesale Corp. were all trading lower. Grocers and analysts say they are concerned that Amazon’s move might start a price war as the e-commerce giant works to broaden the food seller’s reach.
Amazon on Wednesday received Federal Trade Commission approval on the deal, and Whole Foods shareholders voted in favor of it.
The announcement marks Amazon’s first reveal of plans for a deal that gives the online retailer a network of more than 460 brick-and-mortar stores. Some of those stores soon will be equipped with Amazon’s in-store lockers for package pickups, Amazon said. Whole Foods’s private-label items, such as the 365 Everyday Value brand, will be sold on Amazon.
Shares of United Natural Foods , Inc., Whole Foods’s main distributor, dropped by more than 5%.
The deal, which came together in about six weeks, didn’t give the two companies much time to determine exactly what a combination would look like. Since then, they have made progress.
A key component of the tie-up will be the introduction of a Prime membership-based loyalty program that will offer Amazon shoppers deals in stores. The program, which costs $99 annually and offers perks including unlimited two-day shipping, could draw more Amazon customers into Whole Foods stores, and prompt more sign-ups to Prime.
There is a big overlap between the two retailers already, something Amazon’s Mr. Wilke mentioned during a recent public appearance. A Morgan Stanley survey shows about 62% of Whole Foods shoppers are members of Amazon’s Prime service, opening the door for cross-selling to entice customers who shop at both to spend more.
Amazon said it would start integrating Prime into Whole Foods’s point-of-sales system starting Monday, and that the membership benefits would be added after that.
Amazon also has been expected to use the acquisition—which gives it its first major brick-and-mortar network—to help reduce delivery costs. The pickup lockers are a potential first step in further integrating the two companies’ logistics operations, something that could eventually lead to more grocery pickup or delivery options.
Whole Foods once owned the natural and organic food market, but increasingly faced competition as mainstream grocers began to carry similar products at cheaper prices. The Austin, Texas-based company has had its sales slump in the past two years, and began lowering prices, running promotions and advertising on television for the first time in years.
Despite the moves, Whole Foods continued to lose sales and shopper surveys have shown that many customers believe the chain is too expensive. A Morgan Stanley survey earlier this month found that while Whole Foods prices were down slightly from last year, they were still about 15% higher on average than prices at regional supermarkets.
In two years Whole Foods will be just like any other grocery store and the "organic" crowd will be up in arms. Amazon is about selling you a Honda, not an Acura.
In two years Whole Foods will be just like any other grocery store and the "organic" crowd will be up in arms. Amazon is about selling you a Honda, not an Acura.
Amazon's Whole Foods Price Cuts Brought 25% Jump in Shoppers
September 11, 2017
Amazon.com Inc.’s splashy takeover of Whole Foods, complete with deep price cuts, did more than bring a surge of publicity to the chain: It boosted customer traffic by 25 percent.
That’s the finding of Foursquare Labs Inc., which compiled location information during the first two days after Amazon completed its acquisition of the grocer. The data, culled from shoppers’ mobile devices, was compared with the same period a week earlier.
The traffic data is an optimistic sign that Amazon can succeed in the brick-and-mortar world. In some areas, the jump in customers was dramatic. At stores in Chicago, 35 percent more shoppers visited Whole Foods stores, Foursquare found.
It’s not surprising that curious shoppers visited the stores immediately after the takeover, particularly after a bevy of media coverage, according to Jennifer Bartashus, an analyst at Bloomberg Intelligence. What’s left to be seen is whether they will start consistently shopping more at Whole Foods stores.
“A lot of people went to see what they could see,” she said. “The question is if they think the prices are low enough to change their shopping behavior -- it takes a very long time to change a consumer’s perception of prices and value.”
So far, Amazon has had success selling the Whole Foods 365 Everyday Value brand through its website. It put about 2,000 private-label products on the site after the deal closed and sold out of almost all of them, according to One Click Retail. The company said web sales of Whole Foods branded items through Amazon totaled $500,000 in the first week.
But the e-commerce seller still faces plenty of challenges. Handling fresh food is a tricky and expensive proposition that has vexed Amazon for a decade. Even with Whole Foods, Amazon remains a small player in the grocery business. It controls less than 2 percent of an $800 billion market dominated by Wal-Mart Stores Inc., Kroger Co. and Albertsons Cos.
Whole Foods also had struggled in the years leading up to the merger, hurt as its organic produce became less of a novelty. Kroger and Wal-Mart have aggressively expanded their organic offerings, often at lower prices.
That’s fueled the perception that Whole Foods is overpriced. Amazon has a long way to go as it tries to make the chain’s items more competitive with traditional rivals. In a pricing study conducted at a Whole Foods store in New Jersey last month, analyst Charles Grom of Gordon Haskett Research Advisors found that a basket of about 115 items was down just 1.9 percent following the takeover. A separate review at a New York City Whole Foods by Telsey Advisory Group determined Whole Foods prices remained higher than those at Wal-Mart and Kroger despite Amazon’s cuts.
If Amazon was willing to break even at Whole Foods -- taking margins on the chain’s high-end products to zero -- it could reduce prices across the board by as much as 15 percent, according to an estimate by Mikey Vu, a grocery expert at Bain & Co.
And while the initial price cuts generated media buzz, Amazon will have to find ways to keep customers coming back to Whole Foods, Bartashus said.
“It can take multiple trips to truly appreciate that there’s a been a change,” she said. “People went in and bought cheaper bananas, but will they really appreciate the broader efforts? That’s the question.”
Drugstore stocks tumble as Amazon considers selling prescription drugs online
Published 41 Mins Ago
Shares of drugmakers dropped in midday trading Friday after CNBC reported Amazon is in the final stages of considering an entrance into selling drug prescriptions.
Walgreens, Rite Aid and CVS Health stocks each slipped 4 percent or more as investors worried Amazon may disrupt the traditional distributors' hold on the drug prescription market.
Amazon will decide before Thanksgiving whether to move into selling prescription drugs online, according to a source and an email from Amazon viewed by CNBC.
Amazon typically spends years researching opportunities before it telegraphs its intentions. The opportunity to sell drugs online is alluring given its market size – analysts have estimated the U.S. prescription drug market at $560 billion per year. Amazon is well aware of the complexities, say sources familiar with the company's thinking.
Amazon’s getting into the pharmacy business is a ‘matter of when, not if’
Oct 6, 2017
Whether online retailer Amazon plans to enter the pharmacy-services space has been the subject of speculation for months, and Leerink analyst David Larsen is now going public with his position on the will-it-or-won’t-it question.
“It’s a matter of when, not if,” Larsen said, adding that he expects an announcement in the next year or two. “While Amazon is likely still researching what its ultimate strategy should look like, with [approximately 75 million] Amazon Prime lives, seemingly unlimited resources, and highly advanced technology capabilities, we believe [Amazon] can create disruption to the existing market.”
As such, Larsen said he’s more cautious about pharmacy-benefit managers and retail pharmacies, both major players in the pharmaceutical supply chain.
Pharmacy retailers such as Walgreens Boots Alliance and RiteAid Corp. face the biggest threat for now, he said, while companies like CVS Health Corp. may be able to leverage pharmacy-benefit-manager services to reduce risk.
CNBC reported later Friday that an Amazon entry is “very much an ‘if’ and not a ‘when,’” adding that the company will decide by Thanksgiving whether to move into the industry.
Express Scripts Holding Co., the largest stand-alone pharmacy-benefit manager, may be willing to partner with Amazon since it “has been facing deteriorating mail volumes for years and [Amazon’s] technology in our view could be the strategy needed to improve performance,” Larsen said. So might Walgreens, he said, through some kind of retail partnership.
The easiest initial target for Amazon would likely be generic medications, which are lower-cost than so-called specialty medications and make up a majority of prescriptions, Larsen said.
An estimated 5% to 10% of U.S. individuals pay cash for their prescriptions, he said, and Amazon could potentially offer a drug discount program to those customers.
There also might be an avenue into specialty pharmacy through an acquisition, Larsen said, based on conversations with specialists from consulting services firm MEDACorp.
Amazon’s acquisition of Whole Foods in June sparked investor concerns that the store’s physical presence would provide Amazon an opening into the pharmacy category.
But Larsen’s analysis suggested that Amazon’s mail capacity and online services constitute a greater advantage, though he did note that the company could open pharmacies inside Whole Foods stores.
“We’re surprised to learn that it would take just [one or two] years to build a [pharmacy-benefits manager],” Larsen said. “There is significant mail capacity and there are claims platforms available that [Amazon] could use.”
Further, “we do not believe that Amazon has to win a massive amount of [market] share to keep pressure on the pharmacy supply chain,” Larsen said, “rather ongoing reimbursement competition and discussions on drug pricing may be enough to keep pressure on the group.”
Layoffs will reduce meal-kit company’s headcount by around 300 out of roughly 5,000 workers across corporate offices and its fulfillment centers
Oct. 18, 2017
Blue Apron Holdings Inc. is laying off employees as the struggling meal-kit company continues to try to improve its financial position after a difficult initial public offering this year.
The layoffs hit “many” workers of the New York City-based company, Blue Apron Chief Executive Matt Salzberg wrote in a letter to employees Wednesday. A spokeswoman wouldn’t discuss specifics on the work force reductions.
The layoffs will reduce the company’s headcount by around 300 out of roughly 5,000 workers across corporate offices and its fulfillment centers, resulting in expenses of around $3.5 million in its fourth quarter, Blue Apron said.
The layoffs hit the company’s human relations, IT, production and purchasing departments, according to a person familiar with the matter.
“Our leadership and board did not take this decision lightly,” Mr. Salzberg wrote in the letter disclosed in a regulatory filing. “I want to assure you that we believe it was necessary as we focus the company on future growth and achieving profitability.”
Blue Apron’s stock has lost nearly half its value since the meal-kit company’s June IPO was hurt by Amazon.com Inc.’s decision to buy Whole Foods Market, along with order fulfillment problems stemming from the opening of a new New Jersey warehouse.
In August, the company said it would eliminate 1,270 jobs at its older Jersey City facility in October, according to a notice filed with the state.
Reports Q3 2017 earnings on Thurs. Nov. 2. Might have to short this via puts. Fell over 19% when they last reported on Aug. 10
Amazon earnings: Analysts await news of the Whole Foods impact
Oct 25, 2017
Analysts will be looking for Whole Foods’ impact, with analysts at Piper Jaffray expecting about $1.4 billion contribution for the month of September from that new part of the business.
“We believe that Amazon is well-positioned to beat third-quarter margins, excluding Whole Foods, but fourth-quarter margins remain a wild card as Amazon has now added another massive project (Whole Foods) that could prevent meaningful margin expansion in the fourth quarter and first half of 2018,” analysts led by Michael Olson wrote in a note. “Having said that, we believe investors are broadly in favor of Amazon’s P&L investments and are coming to understand Amazon’s reported margin is likely a fraction of its ‘core’margin.”
Analysts there estimate about 7% retail margin versus 1% last year.
Analysts are “highly confident” about Amazon’s AMZN, -0.31% growth, rating the e-commerce giant’s shares overweight with a $1,200 price target.
“We are uncertain how the company will report the Whole Foods division, but believe investors will give them a pass in the near-term,” MKM Partners analysts led by Rob Sanderson wrote in a Monday note.
Analysts there don’t think the company will provide much insight into the impact Whole Foods will have on fourth-quarter guidance either.
“Either way, we think that investors are generally supportive of Amazon’s move into groceries and fresh foods and will likely look through any dilutive impact,” the note said.
MKM rates Amazon shares buy with a $1,275 price target.
“We believe Amazon can deliver about 25% year-over-year revenue growth in the third quarter driven by continued strength in North American retail with Amazon Web Services growing 40% year-over-year,” wrote UBS analyst Eric Sheridan. “While some fear over a prolonged investment cycle (media content, logistics, international and Whole Foods), possible macro headwinds, and competition in cloud remain in focus, we believe the market is increasingly pricing in long-tailed revenue opportunities across a wide range of verticals.”
UBS rates Amazon shares buy with a $1,200 price target.
Earnings: Amazon is expected to report earnings per share of 2 cents, according to FactSet, down from 52 cents per share last year.
Estimize, a software platform that crowdsources estimates from buy-side analysts, hedge-fund managers and others is expecting EPS of 11 cents.
Revenue: FactSet expects sales of $41.58 billion for the quarter, up from $43.74 billion last year.
Estimize forecasts revenue of $42.00 billion for the period.
What to watch for:
Revenue growth at Amazon Web Services (AWS), while still healthy, is expected to continue slowing, and may face further pricing pressure. In the year-ago quarter, Amazon had reported a 55% surge in AWS revenue.
Piper Jaffray expects AWS revenue to grow 40% to $4.52 billion from a year ago, contributing $950 million to operating income. In the year-ago third quarter, AWS contributed $3.23 billion to revenue and $861 million to operating income.
RBC Capital Markets analyst Mark Mahaney, who has similar forecast revenue for AWS, pointed out that margins are much higher than in Amazon’s retail business.
“We expect AWS revenue contribution to continue grinding higher and act as a meaningful, sustainable source of leverage,” Mahaney said in a recent note. “AWS is still growing about 2x faster than the retail segment with operating margins that are 10x greater – Amazon offers arguably the best mix-shift story in tech today.”
Cowen analyst John Blackledge, who has an “outperform” rating and a $1,125 price target on Amazon, expects AWS revenue of $4.55 billion, a 41% rise from a year ago, and operating income of $1.1 billion. While Blackledge said that AWS is the clear leader in fast-growing public cloud market, he said price cuts at the end of 2016 could have a lingering impact on top-line growth and near-term margins.
Reports EPS of $0.52 vs $0.02 estimate -- beat
Revenue of $43.7 billion vs. $41.58 billion estimate -- beat
AWS revenue of $4.58 billion vs. $4.51 billion estimate -- beat
Amazon.com Inc. on Thursday posted strong quarterly sales growth, allowing it to report a higher profit as it expands into more corners of consumer spending.
For the third quarter, profit rose 1.6% to $256 million from $252 million a year earlier. On a per-share basis, profit was unchanged at 52 cents, well above analysts’ consensus estimate of 8 cents.
Meanwhile, sales of $43.74 billion, up from $32.71 billion, were above Amazon’s own forecast of $39.25 billion to $41.75 billion for the quarter and above analysts’ expectations of $42.14 billion.
The jump in revenue is just one measure of Amazon’s scale. Marketing research firm eMarketer estimates that Amazon will command about 43.5% of total e-commerce sales this year, compared with 38.1% last year.
The third quarter is typically a period of heavy spending, as Amazon opens new warehouses to get them up and running in time for the holidays. Amazon also hired 50,000 workers over the period to fill open positions following an August job fair, a feat becoming more expensive as competition for labor increases in logistics hot spots.
The company’s total number of employees increased to 541,900 from 382,400 in the second quarter.
That increase includes Whole Foods Market Inc.’s roughly 87,000 employees, who were added to Amazon’s roster as the $13.5 billion acquisition closed in late August. Since taking over the brick-and-mortar grocer, Amazon has slashed some in-store prices and said it plans to add Prime membership benefits to the payment system to reward loyalty. It is also selling Whole Foods’ private labels online.
Whole Foods added $21 million to operating income and $1.3 billion in sales. North American operating income fell 56% to $112 million.
The online retailer’s bottom line was boosted by its Amazon Web Services cloud-computing division, which increased sales by 42% to $4.58 billion. The unit, which rents computing power to a variety of startups, government agencies and other corporations, has become a major factor in Amazon’s recent streak of profitability.
Still, the division is facing tougher competition from both Microsoft Corp. and Alphabet Inc.’s Google, prompting some concerns about whether the growth can continue at the current pace.
Amazon said it expects fourth-quarter operating income of $300 million to $1.65 billion on revenue of $56 billion to $60.5 billion. Analysts surveyed by Thomson Reuters expect $1.55 billion in operating income and $58.94 billion in revenue.
Amazon Web Services, the cloud-computing business, grew 42 percent in the third quarter, surpassing $4 billion in sales for the first time.
In its earnings report on Thursday after the market's close, Amazon reported AWS revenue of $4.58 billion, topping the $4.5 billion average analyst estimate, according to FactSet.
AWS remains the profit engine for Amazon, which has always operated on thin e-commerce margins. While AWS accounted for 10 percent of Amazon's total revenue in the quarter, the unit generated operating income of $1.17 billion, while the company as a whole had operating profit of just $347 million.
AWS revenue growth was flat compared to the prior quarter, following eight straight quarters of slowing expansion.
"The business model at this scale is transitioning from hypergrowth to high growth alongside an increasing number" of competitors, analysts from KeyBanc wrote in a report on Tuesday. Enterprises are increasingly willing to use more than one cloud, they wrote.
But AWS still leads the market for cloud infrastructure, which companies can use to run their applications without worrying about maintaining the underlying data center hardware.
AWS owned 30 percent of the market in the second quarter, more than double the market share of its closest competitor, Microsoft Azure, which had 14 percent, Matthew Ball, an analyst at Canalys,told CNBC last month.
Drugstore stocks tumble on report Amazon getting pharmacy licenses in multiple states
Oct. 26, 2017
Shares of drugstore companies tumbled midday Thursday on a report that Amazon is getting approval to distribute drugs in multiple states.
The St. Louis Post-Dispatch reported that Amazon received approval for wholesale pharmacy licenses in at least 12 states after reviewing public records. These licenses could be used for distributing other items, such as medical supplies, and do not necessarily mean that Amazon is getting into the pharmacy business.
CNBC reported on Oct. 6 that Amazon will decide before Thanksgiving whether to move into selling prescription drugs online, according to a source.
An Amazon spokesperson said by email that the company doesn't "comment on rumors or speculation."
HelloFresh prices IPO at 10.25 euros per share, centre of range
November 1, 2017
BERLIN, Nov 1 (Reuters) - Loss-making German meal-kit-delivery group HelloFresh on Wednesday priced its initial public offering (IPO) at 10.25 euros ($11.91) per share, at the centre of an indicative price range of 9 to 11.50 euros.
The company said all 27 million newly-issued ordinary shares were placed. Its stock is due to start trading on the Frankfurt stock exchange on Thursday.
It’s a happening week for the meal-kit companies. HelloFresh priced its initial public offering in Europe Wednesday afternoon. Trading begins tomorrow on the Frankfurt exchange, just as Blue Apron reports its own quarterly earnings in the U.S.
Things haven’t exactly gone well for Blue Apron since the company’s own IPO in June; shares closed at an all-time low of $4.77 Tuesday, and they’ve lost more than half their value since the IPO. That hasn’t stopped rival HelloFresh from following its own public dreams.
By and large, Wall Street isn’t expecting much from Blue Apron’s earnings report. Analysts predict sales of $192 million for the September quarter, which would mark a small decline relative to a year ago. A year ago, Blue Apron’s revenue doubled in the September period.
Part of the reason analysts are pessimistic this time around is that Blue Apron is in the midst of switching its fulfillment operations in New Jersey from one location to another. Management has warned that the move is complicating order delivery, and the company pulled back on promotional offers so it wouldn’t risk sending the wrong meals to a wave of new customers.
But the Wall Street worries go beyond the short term. Analysts have become skeptical of the meal-kit business in general. Even as rivals seek to differentiate themselves, they’re all facing similar issues. They offer consumers a limited set of meal options, make them decide on a week’s worth of meals days in advance, and mostly just save time on grocery shopping, not the process of cooking.
As such, customer retention is low. Using public customer data, Emory University marketing professor Daniel McCarthy estimates that 28% of Blue Apron customers are still using the service after six months; that retention rate is just 17% for HelloFresh. Both Blue Apron and HelloFresh rely heavily on expensive marketing to bring in new customers to replace the old ones who don’t stick around. McCarthy calculates that Blue Apron essentially pays $125 for every new customer it acquires.
The key for the meal-kit companies will be finding ways to retain existing members, since that’s a lot cheaper. “What healthy businesses will do is lessen their reliance on new customer acquisition,” he tells Barron’s Next. “They don’t need to bring in new customers and can expand their relationships with old ones.” He cites Amazon.com, a whole different business, of course, but one that does a great job of making money off of its existing customer base.
Blue Apron acknowledges the reality and has said that it wants to spend less on new-customer acquisition and focus on retention. It’s giving customers more flexibility on the number of meals they order each week.
The company is also trying to make its meal-prep process simpler, adding more 30-minute options. But even those may be too complicated for some users.
Other meal-kit startups have built their businesses around easier cooking. Silicon Valley-based Gobble promises U.S. customers “dinner kits designed for 15 minutes with one pan.” The sauces, pastas, and grains you’ll need for each meal arrive partially cooked, saving customers time in the kitchen.
Roughly a half year after signing up, 24% of Gobble customers were still getting at least one meal kit a month, according to Second Measure, which gets its data by tracking credit-card receipts. For the U.S., the firm calculated that 20% of Blue Apron customers and 18% of HelloFresh customers were doing the same.
Blue Apron Holdings Inc. posted a loss and shed customers in the third quarter, straining to retain its edge in the saturated meal-kit market just months after an initial public offering.
The company’s stock fell nearly 8% late morning on Thursday to record lows after it reported a worse-than-expected loss of 47 cents per share and partially lowered its guidance for the rest of the year, projecting a net loss of $131 million to $138 million for the second half of the year instead of its previous $121 million to $128 million range.
Blue Apron’s profitability and customer count suffered from big decreases in advertising, and the company expects severance costs associated with recent layoffs to take a toll next quarter. The company also dropped plans to build a new fulfillment center in California, focusing on one in New Jersey instead.
Still, Blue Apron reported higher-than-expected revenue for its September quarter, and progress transitioning to use of an automated facility meant to make deliveries more efficient and flexible. Blue Apron is also making more off its users, with average revenue per customer increasing to $245 from $227 during the same period last year. The company reported $210.6 million in revenue for the September quarter, higher than the $191.5 million analysts expected.
Blue Apron’s customer count fell to 865,000 in the third quarter, a 9% loss from the previous period and down from a peak of just over 1 million earlier this year.
Blue Apron is trying to offer more products and flexibility to its subscription service. But the shift to an automated fulfillment center in Linden, N.J., has been costlier and slower than expected, while causing problems in fulfilling orders.
The new facility largely drove a jump in Blue Apron’s costs by 44% year-over-year to $65.7 million, another quarter of increased expenses from 2016.
Chief Financial Officer Brad Dickerson said the company also plans to continue cutting advertising this year. “Obviously a pullback in marketing means less customer growth,” he said.
07-27-2017, 11:43 AM
?????
Cashed in before company goes under or gets bought out for dirt cheap.
New all time low. Again.