Amazon had a blowout quarter as people flocked to online shopping
Amazon’s sales and profit soared in the latest quarter as shoppers turned to the online giant to deliver goods to their homes in the pandemic.
Amazon said Thursday that during the three months ending September 30 its sales grew 37% compared to the same period last year, to $96.1 billion, and profit increased 197% to $6.3 billion. The results topped estimates from Wall Street analysts. They do not include Amazon’s Prime Day event, which took place October 13-14 this year after being postponed over the summer because of the pandemic.
Sales at online stores, which include products like Alexa and items Amazon sells directly to customers on its website, grew 38% last quarter. Amazon’s sales from third-party sellers that offer items on its site increased 55%.
Revenue from Amazon Web Services, the company’s cloud computing business and largest profit driver, grew 29%, while its advertising business grew 51%.
Amazon’s sales at physical stores, including Whole Foods, dropped 10%.
“There is no doubt that Amazon’s latest results show it continues to be a winner from disruption caused by the pandemic,” Neil Saunders, analyst at GlobalData Retail, said in a note to clients. But he noted that the boost that the retailer got earlier in the year was an exception that was the result of lockdowns that have since been eased.
Amazon expects sales to be between $112 billion and $121 billion during its final quarter of the year and operating income to be between $1 billion and $4.5 billion, including approximately $4 billion of costs related to the coronavirus.
Amazon’s (AMZN) stock was down nearly 1% during after-hours trading. Heading into Thursday, Amazon’s stock had rallied more than 70% this year.
Amazon has strengthened its position during the pandemic, drawing existing Prime members to its platform more frequently and adding new subscribers.
Amazon’s core Prime shoppers skew higher income, which make them less susceptible to job losses stemming from the pandemic and a new stimulus bill not being passed in Congress, analysts say. Prime shoppers are spending less on travel and other leisure activities than they did before the pandemic and have shifted their spending to electronics, kitchenware and other items.
Amazon’s growth comes at a time when the company is — like its fellow tech companies Facebook (FB), Google (GOOG) and Apple (AAPL) — under scrutiny from lawmakers over concerns about its marketplace power. The House Judiciary Committee released a report earlier this month that found that “Amazon has engaged in extensive anticompetitive conduct in its treatment of third-party sellers” and other tactics that stifle competition. (Amazon has denied wrongdoing.)