Amazon’s e-commerce business showed a significant improvement in the three months leading up to June, following a period of lacklustre spending in a sluggish economy. This growth was attributed to the efforts made by CEO Andy Jassy to enhance the delivery network’s speed and efficiency.
The positive performance contributed to a better-than-expected 11% year-on-year increase in overall sales, reaching $134.4 billion (£105.4 billion). Amazon’s July Prime Day marked its biggest ever, with a record 375 million items purchased. The company exceeded analyst predictions, reporting quarterly profits of $6.7 billion (£5.2 billion), a considerable improvement from the $2 billion loss recorded in the same period the previous year. This profit marked Amazon’s highest in over a year.
CEO Andy Jassy expressed satisfaction with the results, referring to them as “another strong quarter of progress.” While Amazon is renowned for its online shopping platform, its financial success is primarily driven by other units such as Amazon Web Services (AWS) and advertising. AWS sales increased by 12% year-on-year, and advertising revenue surged by 22%.
The positive financial update coincides with indications of economic recovery worldwide. While consumers remain budget-conscious due to inflationary pressures, the pace of price increases has shown signs of slowing down.
Amazon’s online sales saw a 4% year-on-year increase during the April to June period, a notable improvement compared to the stagnant growth earlier in the year. The upturn in Amazon’s e-commerce business is seen as an encouraging sign for the rest of the year.
Even the international business, which experienced declines a year ago, reported sales growth of approximately 10%.
CEO Andy Jassy’s focus on cost-cutting and efficiency improvements has been instrumental in maintaining Amazon’s dominance in the online shopping realm, especially as pandemic-driven growth has slowed down. Investments in artificial intelligence have also been part of the company’s strategy, garnering interest from Wall Street and driving share prices higher.
Given the signs of easing inflation and broader market growth, analysts anticipate better-than-expected performance in the second half of 2023.
Amazon’s extensive ecosystem remains a source of strength, supporting its continuous growth and success. The company’s share price has already surged by approximately 50% this year, with an additional increase of over 7% in after-hours trading following the latest update.