This is a big week in the world of e-commerce:
- Amazon announces first with Q1 results on Tuesday (April 26th)
- eBay is set to announce Q1 results on Wednesday (April 27th) – a preview of that announcement can be found at sister blog eBay strategies here.
Between the two companies we’ll get a feel for how e-commerce in 2011 is shaping up and how some global economic situations (UK austerity, Japan disaster) could adversely impact global e-commerce.
What Wall St is looking for from Amazon in Q1 2011
Amazon surprised Wall St. with their Q4 announcement of lower than expected margins due to substantial investments in fulfilment centres and capex for AWS. Due to that, Wall St’ers are pretty focused on Amazon’s margin picture.
The key metrics Wall St is looking for:
- Revenue – The Street is looking for 34% y/y growth or $9.5b for Q1
- Op income – Street is looking for $485
- EPS – Street is looking for $.57
A large number of Wall St’ers are also more interested in Amazon’s guidance. Currently Amazon has guided Q2 top-line to be $8.86b, and if Amazon keeps that, it will be viewed as a negative, and if it raises it, a positive. Margin guidance will be important as well.
Finally, with the well publized outage at EC2 (Amazon’s cloud computing offering) this week, Wall St. will be looking to understand what happened and any increases in costs Amazon will face and decreases in revenue (customers leaving?) over the incident.
What online retailers are looking at from Amazon’s Q1
While margins are definitely important, what online retailers look for from Amazon is growth numbers. If you are a partner or compete with Amazon, this will give you a good benchmark for how you are doing when compared to e-commerce’s 800lb gorilla. To refresh your memory, we break Amazon into five components (Amazon total, media domestic, media intl, EGM domestic and EGM international). This chart shows Amazon’s growth rates for each of the five segments since Q1 2009. Wall St is anticipating overall growth at 34% and 64% for EGM domestic and 41% EGM intl. So anything stronger than that will be a positive. (click on diagram to enlarge)
What ChannelAdvisor is seeing
Comscore is reporting 11% y/y growth in 2011 vs. 2010 and we’re seeing similar numbers with the exception of March which seemed a little slow.
For Amazon, our Same Store Sales were 84.5%, 74.5% and 70.3% for a Q1 total of 76%. Note that we are strongly biased towards domestic EGM which is the fastest growing segment. That being said, our view is that Amazon is still gobbling up share at a rapid pace and the long-term investments they are making in the necessary infrastructure are prudent if you believe that e-commerce is still in early innings (which we definitely believe).
We’ll update you with details a day or two after earnings once we have time to digest them and compare them with eBay’s view.
SeekingAlpha disclosure – I am long Google and Amazon. eBay is an investor at ChannelAdvisor where I am CEO.