Amazon sees inflation, not inventory, as a key issue (NASDAQ:AMZN)

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In an earnings call following the release of its second quarter results, Amazon (NASDAQ: AMZN) management indicated that inflation remains a concern in the coming quarters.

“Our macro issues are primarily inflation-related,” Chief Financial Officer Dan Olsavsky told analysts late Thursday. conference call. “The pressure on energy prices is increasing the costs of our data centers.”

He added that wage inflation, especially in tech roles, continues to weigh on the company. Additionally, the implementation of an increase in selling fees for the e-commerce business reflected the effects of inflation on the business. Although it was safe to note that the company pursued this course of action reluctantly.

However, when asked by analysts about inventory issues affecting many peers like Walmart (WMT), Target (TGT), and more, Oslavsky played down the impact. According to financial statements released alongside earnings results, inventories jumped about $5.5 billion in the first six months of the year. While still notable, this level is below the aforementioned peers by percentage and Oslavsky expressed confidence in the company’s ability to work with high inventories without pursuing the same margin-squeezing strategies of its competitors.

Learn more about Walmart’s markdown plans impacting earnings forecasts.

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