Latest news:

You are currently not logged in

Log in
E-commerce

Amazon’s 22 per cent sales growth below expectation

Amazon.com has reported US$43.7 billion in revenue for the three months ended December 31, representing 22 per cent growth, but coming in slightly below analyst expectations.

Earnings per share (EPS) for the quarter were US$1.54, coming in slightly above the $1.35 adjusted estimate expected by a Reuters consensus estimate.

Sales for the full year grew 27 per cent to US$136 billion after exchange rate correction, with net income increasing to $US2.4 billion from US$596 million in FY15.

Commenting on the results, Amazon CEO Jeff Bezos focused on the performance of the company’s prime program.

“Prime members can now choose from over 50 million items with free two-day shipping — up 73% since 2015,” he said. “Prime Now added 18 new cities, which means millions more members now get one and two-hour delivery.”

“Tens of millions of new paid members joined the program in just this past year.”

The results have left the world’s largest online retailer predicting sales growth for Q1 17 at between 14 and 23 per cent.

The NASDAQ hasn’t responded favorably to the results, with shares dropping 3.5 per cent immediately following the release.

Commenting on the results, Global Data analyst Anthony Riva said that exchange rates hurt the company, but that the results don’t diminish Amazon’s wider success.

“Amazon is usually a retailer that operates at full volume, the noise of its sales growth a clarion call in an often muted retail sector. However, this quarter that volume seems to have been turned down a couple of notches,” he said.

“Amazon’s growth remains impressive, and is a long way above the retail sector overall, but by the high benchmark it has set, the latest numbers have a certain softness.

“Some of the loss in momentum comes down to a more unfavorable exchange rate. On a constant currency basis […] even so, these upticks still leave a gap in growth compared to what Amazon delivered over the first three quarters of the fiscal.

“As niggling as these points are, they do not diminish Amazon’s success in other areas. Over the holiday quarter, the company saw demand for its devices, including the Echo product, boom. This helped Amazon to a very strong performance in electrical at a time when the overall market was struggling with a lack of newness and innovation,” Riva said.

Amazon is currently updating the market on its forward looking plans.

More to come.

No Comments | Be the first to comment
+-

Comment Manually

I have read and agree to the Terms and Conditions and Privacy Policy.

No comments