Amazon.com Inc. (NasdaqGS: AMZN) shares rallied Friday, lifting consumer discretionary sector-related exchange traded funds after the e-commerce giant’s second-quarter results beat expectations and offered a positive outlook.
On Friday, the Consumer Discretionary Select Sector SPDR (NYSEArca: XLY) rose 3.7%, the Vanguard Consumer Discretionary (NYSEArca: VCR) gained 3.6%, and the Fidelity MSCI Consumer Discretionary Index (NYSEArca: FDIS) was up 3.5%.
Meanwhile, Amazon shares increased 1.7%. AMZN makes up 22.3% of VCR’s underlying portfolio, 19.7% of XLY, and 18.9% of FDIS.
Amazon’s second-quarter revenue growth of 7% outperformed market expectations, and the company even projected third-quarter revenue of between $125 billion to $130 billion or a potential increase of 13% to 17%.
“All in, Amazon provided investors with a very clean 2Q earnings, amid extreme macro-related earnings volatility across tech,” Deutsche Bank analysts led by Lee Horowitz said in a note.
The online retailer’s quarterly performance was unexpectedly strong given the challenging environment of heightened inflationary pressures that have weighed on U.S. consumers and ongoing supply-chain hurdles that have contributed to greater costs.
“Despite continued inflationary pressures in fuel, energy, and transportation costs, we’re making progress on the more controllable costs we referenced last quarter, particularly improving the productivity of our fulfillment network,” Andy Jassy, Amazon CEO, said in a note. “We’re also seeing revenue accelerate as we continue to make Prime even better for members, both investing in faster shipping speeds, and adding unique benefits such as free delivery from Grubhub for a year, exclusive access to NFL Thursday Night Football games starting September 15, and releasing the highly anticipated series “The Lord of the Rings: The Rings of Power” on September 2.”
Several analysts have highlighted Amazon’s results that indicated the company Amazon is making headway on better managing cost concerns that have weighed on previous company earnings in recent quarters, CNBC reported.
For more news, information, and strategy, visit VettaFi.