As old and new Amazon.com competitors gear up to report earnings, investors are eager to know how they plan to withstand the growth of the No. 1 online retailer.
So far this quarter, Amazon has been brought up in some 130 earnings calls from S&P 1500 components according to a Reuters analysis. About 50 of those came in the last week alone.
More than 30 companies reporting earnings in the following weeks mentioned Amazon during their most recent earnings call or were directly asked about threats or opportunities regarding Amazon’s growth.
“Any retailer, whether it’s an online retailer or has online presence, or just brick and mortar, that tells you they’re not concerned about Amazon, they’re either in denial or lying,” said Steven Osinski, marketing lecturer at the Fowler College of Business at San Diego State University.
Beyond retailers like Wal-Mart and Target, and following Amazon’s planned acquisition of Whole Foods Market announced mid-June, expect Amazon to pop up on earnings calls from food producers, packagers and retailers including SpartanNash and Dean Foods. Amazon mentions in less-expected earnings calls could also give investors an idea of where analysts expect the behemoth to strike next.
“It’ll be interesting to see (Amazon CEO Jeff) Bezos’ next move in terms of wanting to expand into a certain space,” said Daniel Morgan, portfolio manager at Synovus Trust in Atlanta.
He said apparel as well as pharmaceutical distribution were among the areas where Amazon has been said to make its next big move. “They’ve shown up in places we didn’t think they’d have competitive impact just two years ago.”
In a sign of Amazon’s widening clout, industry bellwethers like McDonald’s, 3M and Johnson & Johnson in their latest earnings calls were asked for the first time about effects of Amazon on their businesses.
Consumer discretionary is the S&P 500 sector expected to post the smallest year-over-year earnings growth this reporting quarter, with a gain of 3.3%. Overall, earnings are seen rising 12% from last year.
As costly as sector stocks are, Amazon has kept growing faster than most, up more than 31% year to date.