Yesterday, Amazon announced it had missed estimates for sales, earnings and forward guidance. CEO Jeff Bezos attributed the losses to a massive investment in daily-deal site LivingSocial that didn’t pan out.
Amazon shares tumbled and sceptics argued that Amazon selling the Kindle at-cost and offering free shipping to certain members made it difficult to turn a profit.
But there’s no reason to doubt Amazon long-term, according to an article by David Streitfeld in the New York Times. The company does e-commerce better than anyone else in the world, and other retailers are rushing to mimic their methods.
“We know that chief executive Jeff Bezos is quite patient and has plenty of financial resources. It appears his strategy is working,” Jason Moser, who covers Amazon for the Motley Fool investment site, told the NYT. “The third-quarter loss was modest and the long-term implications here are as strong as ever. My faith isn’t dented in the least.”
The company’s latest big product, the Kindle Fire HD, is expected to go head-to-head with the iPad mini this holiday season.
Amazon had a few short-term struggles last quarter. But the retailer’s future is bright. It has millions of customers and has a proven track record of doing e-commerce better than anyone else in the world.
“[Amazon is] just revolutionizing retail. I don’t think any other adjective or any other verb would suffice. They are changing the way every retailer on the planet is thinking about retailing, and if they aren’t, they should be thinking about it differently because of Amazon,” Nomura Equity Research analyst Aram Rubinson told WWD last month.
One bad earnings statement doesn’t change that.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.