Amazon.com (AMZN) is seeing interest in the pre-market session, now up as much as 1.2%. This is apparently due to the ChannelAdvisor January 2013 numbers. These numbers show Amazon.com's 3P suppliers trading through ChannelAdvisor having posted like-for-like growth of 34.3% yoy in January 2013 versus 29.8% growth in December 2012.
This is highly misleading. The base for comparison was much easier during January 2013. Back in December 2011, ChannelAdvisor reported growth of 51.3% yoy and in January 2012 that growth rate fell all the way down to 41% yoy, so the base for comparison was 1030 bps easier in January 2013. Not only that, but comparisons then turn much harder going forward. February 2012 showed growth of 59.9% yoy and March 2012 was up 50.7% yoy, so both months will present much harder comparisons in 2013.
Now take into account this. Q4 2012 had an average ChannelAdvisor growth of 38.5% yoy. This led to Amazon.com reporting +22% overall revenue growth. Given the harder comparisons coming up for February and March, it's likely that Q1 2013 will average growth below 30%, which will imply Amazon.com overall revenue growth well below 22%. The problem here is obvious: present Amazon.com consensus revenue growth is still at 22.6%!!
So here we have an instance where the market is celebrating a number which will imply a miss on revenues. This much was also obvious from other signs, namely the fact that Amazon.com is once again promoting and discounting the Kindle Fire 8.9 HD - the more expensive tablet with which it can hope to produce more revenue no matter what the earnings are. Amazon.com tried the same during Q4 2012, promoting the Kindle Fire 8.9 HD as well. I said at the time that it implied revenue weakness, and it was indeed confirmed by the large $1 billion miss versus estimates which Amazon.com ended up reporting.
The reasoning above is already enough to imply weak revenues in Amazon.com's Q1 2013. However, there's yet another effect which reinforces this thesis. ChannelAdvisor's numbers are regarding 3P (third party) sales. Amazon.com is not collecting sales taxes for out-of-state 3P sales in Texas and California, while it is being forced to collect on 1P (own sales) - this makes for a shift in sales towards 3P, thus inflating ChannelAdvisor reported numbers versus overall sales. What this means is that it's even more likely that overall revenues are tracking well below estimates than a simple comparison between growth rates - which I did above - would imply.
Amazon.com's seemingly strong ChannelAdvisor numbers for January 2013 are just so because of a weak comparison basis back in January 2012. Come February and March, the numbers will weaken considerably due to a much higher base, leading to ChannelAdvisor reported growth below 30% for the entire Q1 2013. This kind of ChannelAdvisor reported growth implies a miss on revenues for Amazon.com in Q1 2013.
Disclosure: I am short AMZN.