Amazon: Fretting Over Margins

The Street is suddenly concerned about pressure on gross margins at (AMZN). The issue came up in two Street research notes this morning; while in the real world it takes three data points to declare a trend, I’ll settle for two.

RBC Capital’s Stephen Ju this morning repeated his Outperform rating on the stock, but cut his price target to $70, from $73, and trimmed EPS estimates. For 2009, he now sees $1.88, down from $1.94. He writes that “channel checks indicate broad-based gross margin compression across the e-commerce landscape, with aggressive price promotions used to drive traffic.” And that includes Amazon. Ju believes Amazon employed price promotions and coupons in particular for “more highly trafficked, in-season, head-of-the-curve items.” He also cut his Q4 estimate to 50 cents, from 55 cents.

Read the rest of this post

Must-Reads from other Websites

Panos Mourdoukoutas

Why Apple Should Buy China’s Xiaomi

Paul Graham

What I Didn’t Say

Benjamin Bratton

We Need to Talk About TED

Mat Honan

I, Glasshole: My Year With Google Glass

Chris Ware

All Together Now

Corey S. Powell and Laurie Gwen Shapiro

The Sculpture on the Moon

About Voices

Along with original content and posts from across the Dow Jones network, this section of AllThingsD includes Must-Reads From Other Websites — pieces we’ve read, discussions we’ve followed, stuff we like. Six posts from external sites are included here each weekday, but we only run the headlines. We link to the original sites for the rest. These posts are explicitly labeled, so it’s clear that the content comes from other websites, and for clarity’s sake, all outside posts run against a pink background.

We also solicit original full-length posts and accept some unsolicited submissions.

Read more »