Amazon unveiled better than expected sales in the latest quarter as Prime members flocked to its website to snap up bargains.
The boost to revenue, along with cost-cutting that included large-scale layoffs earlier this year, also boosted Amazon’s profit margins and contributed to after-tax earnings that were nearly double expectations.
The tech giant said its Prime Day sales event over July 11-12 was its largest ever, saving customers £2bn on deals.
The business posted sales of $134.4bn, up 11%, and told Wall Street it expected its near-term revenues and profits to smash expectations.
Amazon reported net profits of $6.7bn in the three months ending in July, compared to a loss last year.
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The online giant’s internet infrastructure arm Amazon Web Services division reported $22bn in sales, beating most analysts’ forecasts, feeding hopes that the cloud division has turned a corner.
Revenue growth at AWS had slowed to 16% in the first quarter, compared to 29% for all of 2022.
Chief financial officer Brian Olsavsky said the performance reflected a “stabilisation” in the cloud business, and that while customers were still trying to squeeze more out of their cloud spending, Amazon was seeing increasing demand for new computing workloads, with generative AI contributing to the recovery.
Helmut Rieder, CEO of Centre of Excellence for Amazon at Wunderman Thompson Commerce & Technology, says there’s plenty that brands can take from Amazon’s results bouncing back in the current economic climate, “not least that the fundamentals of shopping are at the centre of the marketplace experience”.
“It’s not all good news for Amazon, however. Own-branded marketplaces are growing, with 68% of retail leaders considering creating their own to take back control and work directly with brands,” Rieder said.
“But until others can match the sprawling service, delivery speed and popularity that moments like Prime Day offer, the tech giant will retain its edge.”
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