Amazon’s profit reached a new high after soaring nearly 90 per cent in the fourth quarter, while its sales also achieved double-digit growth thanks to a successful holiday season.
The company’s overall net sales rose 10 per cent to $187.8 billion in the quarter ended December 31, with North America segment up 10 per cent, international segment up 8 per cent and AWS up 19 per cent.
Despite tough prior year numbers, Amazon still smashed through the high ceiling to post an impressive sales growth, said GlobalData MD Neil Saunders. This is a significant milestone, meaning that the company has added over $100 billion to its Q4 top line since 2019, he added.
On the bottom line, operating income grew 60.5 per cent and net income soared 88.3 per cent.
According to Saunders, this is the first quarter in which the company has topped the $20 billion mark in net income.
“While Amazon has made investments across the course of 2024, its stance of efficiency and seeking to make the organization leaner have paid handsome dividends,” he explained.
On the product front, sales increased 7.2 per cent, the best growth rate for the fiscal year.
Saunders highlighted that Amazon had enlarged its market share and shopper base thanks to its reliability and speed in terms of shipping and the breadth of its range.
The expansion of fast shipping times to more rural and super-rural areas and the addition of more low-priced items to consumables categories also contributed to the increases, he added.
The analyst believes these factors helped offset the challenges from the continued rise of the Chinese marketplaces.
“While players like Shein and Temu are also taking ground, they have not made serious inroads into Amazon’s customer base. There is certainly a little more customer sharing and leakage of spending than there used to be, but consumers are using the platforms in different ways and for different needs,” he elaborated.
For the full year, Amazon reported an 11 per cent increase in net sales and a 97.4 per cent growth in net income.
The company expects net sales to grow 5-9 per cent in the first quarter of FY25.
