And that is a good thing as far as the Street is concerned...
Again, gross shipping cost exposes the last mile lie... Up versus last year as a % of sales. Quarterly trend is up. Isn't all that buildout supposed to be reducing shipping cost?
Let's see. Fulfillment and gross (unmanipulated by Prime revenue transfers and accounting gimmicks) shipping cost both are increasing as a percent of net sales.... It will be interesting to see how the analysts continue to perpetuate the lies...
Analysts will see increased cost of sales as an investment, not as increased operating expenses and spin it as positive. AMZN does not trade on fundamentals and never will. The worse the company performs, the higher the stock price. As an Amazon Prime customer and Seller (who uses Amazon's fulfillment services), sellers subsidize so many portions of their business. No brick and mortar can compete.
Even gross margin growth, which was touted as substitute for revenue, has slowed (35% down from 40%+). I don't know why some pundits keep quoting gross margin % which is clearly a meaningless measure given the changing mix of 3P and 1P sales. It seems reasonable to look at absolute gross margin $$ growth, but again that too is slowing.
Gene Munster said that investors would be looking for the "hope" of margin improvement this Q - that's the word he actually used, not improved margins but the hope. I don't think we saw even that here.
I could have a field day with this... The economics of the business model simply aren't as is being claimed. Anyone who has taken cost accounting and understands activity based management/costing gets it. Further, the macro cost drivers have changed.