Amazon’s Jeff Bezos hails Prime scheme despite missing profit forecasts

Amazon prime
// Amazon net sales reach £50.9bn for the 2nd quarter ending June 30
// Net income increased from £2bn in 2018 to £2.1bn

Amazon’s revenue has risen in the last three months as chief executive Jeff Bezos hailed the success of its Prime scheme, despite profits missing forecasts.

The online retail giant said its net sales for the second quarter ending June 30 were $63.4 billion (£50.9 billion), up 20 per cent from the $52.9 billion (£42.5 billion) reported this time last year.

Meanwhile, second-quarter net income came in at $2.6 billion (£2.09 billion), equating to $5.22 (£4.19) per share, which was above $5.07 (£4.07) this time the last year but lower than analyst estimates of $5.57 (£4.48) per share.

“Customers are responding to Prime’s move to one-day delivery – we’ve received a lot of positive feedback and seen accelerating sales growth,” Bezos said.

“Free one-day delivery is now available to Prime members on more than 10 million items, and we’re just getting started.”

Amazon said Prime Day was “the largest shopping event in Amazon history with more than one million deals exclusively for Prime members”.

Over the two days of Prime Day, on July 15 and 16, sales surpassed the previous Black Friday and Cyber Monday sales combined.

However, Amazon is likely to face scrutiny after the US government announced it would undertake an antitrust investigation into some of the tech industry’s largest firms.

Moreover, the European Commission launched a formal antitrust investigation in mid-July to find out whether Amazon’s use of sensitive data from independent retailers who sell on its platform, is in breach of EU competition rules.

Amazon recently announced it was going to hire 2000 new roles in the UK throughout this year, taking its employee numbers to 29,500.

The online retailer expects its third quarter net sales to be between $66.0 billion (£53 billion) and $70.0 billion (£56.3 billion), or to grow between 17 per cent and 24 per cent compared with third quarter 2018.

Operating income is expected to be between $2.1 billion (£1.68 billion) and $3.1 billion (£2.49 billion), compared with $3.7 billion (£2.97 billion) in third quarter 2018.

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