Amazon’s net income has surged on the back of higher third-quarter sales, breaking the trend of a modest slowdown with a stronger pace of growth than it delivered the previous quarter.
The e-commerce giant’s net income soared 54.5 per cent year on year to US$15.3 billion ($23.27 billion) as net sales rose 11 per cent to $158.9 billion ($241.6 billion).
Its North American segment sales grew 9 per cent to $95.5 billion, while its international segment sales climbed 12 per cent to $35.9 billion. Amazon Web Services sales jumped 19 per cent to $27.5 billion.
“We kicked off the holiday season with our biggest-ever Prime Big Deal Days and the launch of an all-new Kindle lineup that is significantly outperforming our expectations,” said Andy Jassy, Amazon president and CEO.
“There’s so much more coming, from tens of millions of deals, to our NFL Black Friday game and Election Day coverage with Brian Williams on Prime Video, to over 100 new cloud infrastructure and AI capabilities that we’ll share at AWS Re:Invent the week after Thanksgiving.”
For the fourth quarter, Amazon forecasts net sales to increase between 7 per cent and 11 per cent from the year-ago period to $181.5 billion to $188.5 billion.
Analyst Neil Saunders, MD at GlobalData, said the results “adequately address the concern that Amazon’s stellar performance is slipping – at least for this year – although we maintain the longer-term outlook will remain tighter”.
Saunders said Amazon’s product sales expanded by 7 per cent, which is the best rate of growth in six months.
“During the quarter it was helped along by the summer Prime Day sale. This is always a big event for Amazon but, despite even tougher competition from other retailers jumping aboard the discount bandwagon, Amazon remained the focal point and pulled in more shoppers than ever. Some of this is down to consumers being more receptive to discounts, but some is also because Amazon has fine-tuned the deals it offers to ensure they are relevant and compelling. This aids conversion.
“While Amazon does not pretend to be a discount site, it is conscious that consumers are deal hunting and looking for value for money,” he continued.
“That is one of the reasons it put so much effort into Prime Day and Prime Big Deal Days. The latter event does not fall into the current quarter, but from our data and from Amazon’s positive forward guidance, we believe it was another banner event for driving sales.
“More generally, Amazon continues to gain ground with customers wanting to find good value for money outside of sale periods, which is helping it to take market share across some categories. On this front, the attraction is both that Amazon has competitive prices with other retailers and that it has a very broad and deep range that allows customers to shop across the price spectrum – including finding low opening price points,” said Saunders.
“This, in our view, is at least a partial competitive defence against Chinese discounters like Temu and is one of the reasons Amazon has not been too unduly affected by their rise.”
