Amazon Prime Day:
Consumers will be put to the test next week with Amazon (AMZN) holding its two-day Prime Day event, Target (TGT) running its three-day Deals Day event, Best Buy (BBY) having a Black Friday in July sale, Macy’s (M) holding a Black Friday in July event and Walmart (WMT) already offering high levels of markdowns. Jefferies estimated that Prime Day will contribute $8.1B to gross merchandise value and $4.7B to sales, which represents a 6% tailwind for GMW and 4% boosts for sales. “We see Prime Day helping to boost Prime adoption, especially in international markets, which have lower membership penetration and 3 new countries participating in 2022 Prime Day,” previewed the firm. Prime Day has helped drive incremental Prime Membership adoption in the past. Earlier this year, Amazon raised its Prime fees in the U.S. in March to $14.99 a month from $12.99 and to $139 a year from $119. The price increase is expected to drive ~$2.8B in incremental Prime subscription revenue from existing subs throughout the year. The read-through on inventory levels and discounting will be key as investors assess the outlook for the retail sector in Q3.