Amazon (NASDAQ:AMZN) experienced a surge of 2.5% in its stock price on Thursday afternoon following the announcement that this year’s Prime Day marked the company’s most successful sales day ever.
According to data compiled by Adobe Analytics, online sales in the U.S. during the event increased by 6.1% to reach an impressive $12.7 billion, with $6.3 billion spent on the second day alone. Prime members contributed to this success by purchasing over 375 million items globally and saving more than $2.5 billion on various deals offered throughout the two-day extravaganza. The average order size also witnessed a slight rise to $54.05 compared to $52.26 last year, as reported by Reuters, citing data from Numerator.
The positive momentum extended beyond Amazon, as other internet retailers also experienced a boost in their stock prices. ContextLogic saw a notable increase of 9.7%, while PDD Holdings and JD.com rose by 4.9% and 4.2% respectively. Chewy saw a rise of 1.4%, Etsy increased by 2.7%, and RealReal jumped over 11%. Newegg Commerce experienced a 3.5% increase, and Overstock.com rose by 3.1%.
Rise in Back-to-School Sales
The second day of the event witnessed a significant surge in sales for back-to-school items. Analyst Vivek Pandya from Adobe Digital Insights noted that sales of stationary and office supplies rose by 76% on July 12 compared to average daily sales in June, as reported by Reuters. This surge aligns with expectations for a record-breaking back-to-school and back-to-college shopping season. According to a survey by the National Retail Federation and Prosper Insights & Analytics, back-to-school spending is anticipated to reach a record $41.5B, an increase from $36.9B in the previous year. Similarly, back-to-college spending is expected to exceed last year’s record, reaching approximately $94B, a staggering $20B rise.
The surge in spending is primarily attributed to the increased demand for electronics, with 69% of back-to-school shoppers indicating their intention to purchase electronics or other computer-related accessories. This figure is higher than the 65% recorded last year and marks the highest in the survey’s history. Total spending on electronics is projected to reach a record-breaking $15.2 billion.
Outlook and Analysis
Wells Fargo highlighted Amazon’s impressive performance during this year’s Prime Day, reporting sales of 375 million units compared to 300 million in 2022, indicating growth in gross merchandise value (GMV) of over 20%. While acknowledging the possibility of demand pulling forward, Wells Fargo analysts, led by Ken Gawrelski, expressed optimism about the positive impact on the company’s revenue trajectory for the third quarter. In contrast, Adobe’s projected growth rate of 6-7% appeared incongruent with the reported figures, according to the same note.
Jefferies analysts, led by Brent Thill, acknowledged the remarkable success of Amazon’s Prime Day but cautioned about increasing competition in the market. The firm cited competing retail events such as Walmart’s Deals for Days from July 10 to 13 and Target Circle Week from July 9 to 15. Despite this, Jefferies maintained that Amazon shares remain attractive even after a 56% year-to-date increase, noting the potential for further growth driven by exceeding consensus estimates and multiple expansions.
Cowen, which holds an Outperform rating on AMZN, expressed a similarly positive outlook, anticipating the company to surpass expectations in terms of revenue and operating income when it reports second-quarter earnings later this month.
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Author Faith Yakubu 
