Portrait Weekly Framing: Amazon's Prime Day Slowdown
Welcome to this week's edition of the Portrait Weekly Framing. Today, we'll be examining the implications of Amazon's Prime Day sales decline and what it reveals about the broader consumer spending environment.
Amazon's Prime Day 2025 got off to a slow start, with sales falling almost 14% in the first four hours compared to the same period last year, according to data from Momentum Commerce, which manages 50 brands across various product categories. This marked decline in what has become one of the most closely watched consumer spending events represents more than just an Amazon-specific challenge—it potentially signals broader headwinds facing consumer discretionary spending amid persistent inflation and economic uncertainty.
The timing of this weakness is particularly notable given that Prime Day has evolved into a bellwether for consumer sentiment and spending patterns. The event's performance often provides early insights into consumer behavior that can extend well beyond Amazon's ecosystem to impact the broader retail, e-commerce, and consumer goods sectors. With Q2 earnings season approaching, this early data point raises questions about whether consumer spending resilience may finally be showing cracks.
To understand whether Amazon's Prime Day weakness represents an isolated event or signals broader consumer spending deterioration, I wanted to establish a comprehensive monitoring framework for consumer bellwether companies and key spending indicators. Using Portrait's Monitors feature, I set up tracking for companies across the consumer discretionary spectrum and key topics that could provide early warning signals of spending shifts:
What type of companies are you looking to monitor?
Consumer bellwether companies including major retailers, e-commerce platforms, consumer goods manufacturers, and discretionary spending categories
Datapoints to Find
U.S. consumer spending trends, sales performance, inventory levels, promotional activity, and management commentary on consumer behavior
The initial monitor results reveal a stark bifurcation in consumer behavior that extends far beyond Amazon's Prime Day performance. While goods-based retailers across categories—from athletic apparel to beverages to home improvement—are experiencing significant headwinds, the services sector, particularly travel and experiences, continues to demonstrate remarkable resilience. This divergence suggests that Amazon's Prime Day weakness may indeed be symptomatic of broader consumer goods challenges rather than an isolated e-commerce issue. The data shows consumers are making deliberate trade-offs, prioritizing high-value experiences while pulling back on discretionary goods purchases, creating a complex landscape where promotional intensity is rising even as inventory challenges persist across multiple sectors.
U.S. Consumer Health & Spending Trends Monitor
The current U.S. consumer landscape presents a bifurcated and complex picture, characterized by a clear split between robust spending on experiences and value-oriented services versus significant caution and cutbacks on discretionary goods. Macroeconomic data signals growing consumer apprehension, with consumer confidence declining for a second consecutive month in June and a notable pullback in restaurant spending in May, the largest since 2023.
This caution is acutely felt in the goods sector. Constellation Brands (STZ) provides a stark example, with management detailing persistent softness and no signs of improvement. They note that their core Hispanic consumer is under pressure, reducing beer consumption occasions due to socioeconomic factors. Similarly, athletic apparel retailers like Nike (NKE) and Under Armour (UAA) are navigating a challenging retail environment marked by lower demand. Lowe's (LOW) management describes a financially healthy homeowner who is nonetheless delaying big-ticket DIY projects due to high interest rates, creating significant "pent-up demand" without a clear timeline for its release. Commentary from Sam's Club (WMT) reinforces this theme, describing a consumer who is "conscious and choiceful," consistently prioritizing food and consumables, though general merchandise is showing early signs of stabilization after several quarters of pressure.
In stark contrast, the services sector, particularly travel, is thriving. Carnival Cruise Line (CCL) reports exceptionally strong and resilient consumer demand, delivering record revenues, net yields, and onboard spending in its latest quarter. Management notes no differentiation in spending patterns between lower-income and premium consumers, attributing the brand's success to its "tremendous value compared to land-based alternatives." This suggests consumers are still eager to spend but are prioritizing experiences that offer a high perceived value.
Key Takeaway: The U.S. consumer is not in a full-blown retreat but is actively making trade-offs, prioritizing value-driven experiences while cutting back on discretionary goods like apparel, beverages, and big-ticket home items. This behavior reflects a cautious consumer navigating an uncertain economic environment.
Sales Performance
Sales results directly mirror the bifurcated spending trends. Weakness is prevalent across most goods-based retailers, while travel and value-focused retailers show strength.
Negative Indicators:
Amazon (AMZN): Early data from Prime Day 2025 showed a significant negative inflection, with spending down 14% in the initial hours compared to the prior year.
Nike (NKE): North American sales remain weak, declining 11% YoY in Q4, with the direct-to-consumer channel down 14% and the digital channel falling a steep 26%.
Constellation Brands (STZ): Reported broad-based declines, with Q1 Beer net sales down 2% (shipments -3.3%) and organic Wine & Spirits net sales plummeting 21%.
Autos: The June 2025 U.S. auto sales SAAR of 15.5M was soft, declining from May's 15.7M and showing no growth YoY.
Positive/Mixed Indicators:
Carnival (CCL): Delivered record Q2 revenues of $6.3 billion, raised full-year guidance, and sees its 2026 booked position in line with 2025's record levels at historically high prices.
Sam's Club (WMT): Posted a healthy 6-7% comp in its recent quarter, led by fresh food and health/wellness. Encouragingly, general merchandise comps were also positive for the fourth consecutive quarter.
General Motors (GM): Outperformed the broader auto market in June, gaining 40bps of market share with a 6% increase in sales on a Daily Selling Rate (DSR) basis.
Inventory Levels
Inventory management remains a central challenge, particularly for apparel retailers, while other sectors are focused on maintaining discipline to avoid future gluts.
Apparel Overhang: Nike (NKE) continues to struggle with an inventory overhang. Despite an 11% sales decline in North America, inventories remained flat YoY, signaling that channel cleanup is ongoing and will likely require further promotional activity. Management hopes to achieve a "healthy and clean" position by the first half of fiscal 2026.
Beverage & Auto Discipline: Constellation Brands (STZ) reported stable inventory levels, but a 10% increase in accounts receivable relative to sales could be a leading indicator of slowing collections or channel fill. In the auto sector, GM management repeatedly emphasized its focus on inventory discipline to avoid the historical boom-bust cycle of overproduction followed by heavy discounting. However, overall industry inventory for autos rose from 47 to 50 days supply in June.
No Issues in Travel: Carnival (CCL) has no inventory concerns; its customer deposits hit an all-time high of $8.5 billion, and its booking curve is the furthest out on record.
Promotional Activity
The promotional environment for goods is intensifying as retailers compete for the cautious consumer's dollar and work to clear excess inventory.
Heavy Discounting: Nike (NKE) is a prime example, with its Q4 gross margin falling 440 basis points due to "higher discounts and changes in channel mix." Management is aggressively liquidating aged inventory through factory stores and value partners.
Strategic Responses: Constellation Brands (STZ) acknowledged an increase in price promotions across the beer industry and is responding with targeted pricing on certain products and increased marketing spend. In contrast, Under Armour (UAA) is strategically reducing promotional activity to protect margins, even at the expense of top-line growth.
Competitive Landscape: The summer promotional season is heating up, with Target and Walmart launching competing sales events to coincide with Amazon's Prime Day, which itself was extended from two to four days—a move signaling a push to capture sales in a competitive environment.
Pricing Power in Travel: Carnival (CCL) stands out as the exception, maintaining pricing discipline with no need for discounting due to robust demand.
Management Commentary & Outlook
The tone from corporate leadership is overwhelmingly cautious, with a focus on internal execution and navigating uncertainty. The exception, again, is in the travel sector.
Goods Sector Caution:
Nike (NKE): Management stated results are "not where we want them to be" and that a full recovery "will take time," focusing on internal "Win Now" actions.
Constellation Brands (STZ): Executives see continued "consumer concern" and do not expect a "significant consumer change" in the near term. Their reaffirmed guidance is predicated on easier comps, not a market rebound.
Lowe's (LOW): Leadership feels "really good about the homeowner" but is not planning for a meaningful improvement in the macro environment (i.e., lower interest rates) that would unlock pent-up demand.
General Motors (GM): The focus is on "discipline" in production and pricing to maintain stability and avoid contributing to market cyclicality.
Travel Sector Bullishness:
Carnival (CCL): Management highlights the "remarkable resilience" of consumer demand and the company's strong value proposition. Despite some booking volatility from geopolitical events, the overall outlook remains exceptionally positive.
To better understand which specific retail and consumer companies might be most vulnerable to this shift, I decided to screen for companies in the “Consumer Discretionary” sector with market capitalization greater than $5 billion that have potential exposure to this dynamic:
Find me companies that… have discussed emerging challenges from rising channel inventories, increasing promotional pressure, or other indicators of softening consumer demand.
The screening results reveal a comprehensive picture of consumer spending stress that extends far beyond Amazon's Prime Day performance. Among the 39 companies identified, one particularly striking pattern emerges: even traditionally resilient categories are showing cracks. Whirlpool Corporation provides a compelling example, with management explicitly discussing how Asian competitors imported over 30% more appliances in late 2024 and early 2025 ahead of potential tariffs, creating significant channel inventory buildup that's now pressuring market share and pricing dynamics. The company noted that consumer confidence has declined sharply due to tariff uncertainty, leading to weak discretionary demand that has persisted for two years, with expectations of flat to slightly down market demand going forward.
Whirlpool Corporation (WHR.UP)
Quantitative Criteria
Market Cap: $5,991.43 million
Company Documents & Portrait Case Studies
Find me companies that: Find me companies that… have discussed emerging challenges from rising channel inventories, increasing promotional pressure, or other indicators of softening consumer demand.
Rising Channel Inventories: Whirlpool explicitly discusses significant import preloading by Asian competitors, with imports up over 30% year-over-year in late 2024 and early 2025, causing channel inventory buildup and market share pressure. [Whirlpool Corporation, Q1 2025 Earnings Call, Apr 24, 2025], [Whirlpool Corporation, Q1 2025 Earnings Call, Apr 24, 2025], [Whirlpool Corporation Presents at J.P. Morgan 18th Annual Homebuilding & Building Products Conference, May-20-2025 02:00 PM]
Increasing Promotional Pressure: The company notes increased promotional spending in 2023 and early 2024, followed by a reduction in Whirlpool's own promotional activity due to lack of incremental volume, but anticipates competitors increasing promotions around key holidays. [Whirlpool Corporation Presents at J.P. Morgan 18th Annual Homebuilding & Building Products Conference, May-20-2025 02:00 PM]
Softening Consumer Demand: Management highlights a sharp decline in consumer confidence linked to tariff uncertainty, leading to weak discretionary demand that has persisted for two years, with expectations of flat to slightly down market demand. [Whirlpool Corporation, Q1 2025 Earnings Call, Apr 24, 2025], [Whirlpool Corporation Presents at J.P. Morgan 18th Annual Homebuilding & Building Products Conference, May-20-2025 02:00 PM], [Whirlpool Corporation, Q1 2025 Earnings Call, Apr 24, 2025]
Comprehensive Evidence: These points are consistently emphasized across multiple recent earnings calls and investor presentations, demonstrating a clear and explicit acknowledgment of the emerging challenges from rising inventories, promotional pressure, and softening demand.
To further research Amazon, Whirlpool, or any other company, head over to Portrait today!