Yahoo Finance

(Bloomberg) -- Amazon.com Inc. said it’s bracing for a tougher business climate in the coming months, echoing concerns from a range of companies that tariffs and related economic turmoil could crimp consumer spending.

Most Read from Bloomberg

• NYC Lost $9 Billion of Income to Miami, Palm Beach in Five Years

• NJ Transit Urges Commuters to Work Remotely If Union Strikes

• New York City Transit System Chips Away at Subway Fare Evasion

• NYC’s MTA to Cut Costs Instead of Borrowing More to Fund Upgrades

• NYC’s Congestion Toll Raised $159 Million in the First Quarter

When it reported results Thursday, the world’s largest online retailer posted a decent first quarter but said operating profit in the current period would be weaker than Wall Street anticipated.

Amazon projected operating profit of $13 billion to $17.5 billion, compared with an average estimate of $17.8 billion. Sales will be $159 billion to $164 billion in the period ending in June, the company said in a statement. Analysts, on average, expected $161.4 billion.

In issuing its forecast, Amazon said results may be “materially affected by many factors,” such as “tariff and trade policies,” currency fluctuations and “recessionary fears.” Amazon didn’t mention tariffs in its first-quarter forecast in early February.

“Obviously, none of us knows exactly where tariffs will settle or when,” Chief Executive Officer Andy Jassy said on a conference call after the results were released. “We haven’t seen any attenuation of demand yet. To some extent, we’ve seen some heightened buying in certain categories that may indicate stocking up in advance of any potential tariff impact.”

First-quarter sales increased 9% to $155.7 billion, compared with the average estimate of $155.2 billion. Operating income was $18.4 billion in the period ended March 31. Analysts projected $17.5 billion.

The company’s reputation for competitive prices and a broad base of suppliers could insulate it if shoppers become more deal-focused. But a pullback by the independent Chinese sellers who help stock Amazon’s warehouses could hit the logistics and high-margin advertising businesses.

There are already signs of a slowdown. Revenue from third-party seller services increased 6% to $36.5 billion in the first quarter, falling short of analysts’ average estimate. Advertising, which has been the company’s fastest-growing unit, gained 18% to $13.9 billion, in line with estimates.

“Amazon advertising remains vulnerable to cuts in spending from the many small and mid-sized sellers who will be most squeezed by tariffs on goods from China, and revenue growth from the third party marketplace has slowed significantly from the levels of just a few quarters ago,” said Sky Canaves, an analyst at Emarketer.