Amazon's net sales in the second quarter reached $121.2 billion

On July 28th local time, Amazon released its second quarter financial report for fiscal year 2022 (ending June 30th) . Amazon's net sales in the second quarter were US$121.234 billion, a year-on-year increase of 7% , exceeding the previous expectations of Wall Street analysts .

Amazon shares rose more than 13% after it reported better-than-expected second-quarter revenue and gave an optimistic outlook for revenue going forward .

The financial report shows that Amazon's net sales in the second quarter were US$121.23 billion, which was previously expected to be US$119.09 billion , an increase of 7% compared with US$113.08 billion in the same period of 2021 , and a year-on-year increase of 10% excluding the impact of exchange rate changes ; the net loss was US$2.028 billion, compared with a net profit of US$7.778 billion in the same period last year .

Amazon 's specific revenue for each segment in the second quarter is as follows , broken down by its own online stores, physical stores, and third-party sellers .

Net sales from online stores were $50.855 billion , down 4% from $53.157 billion in the same period last year , and were flat year-over-year excluding the impact of exchange rate changes .

Net sales from physical stores were $4.721 billion , up 12% from $4.198 billion in the same period last year , and up 13% year-on-year excluding the impact of exchange rate changes .

Net sales from third-party seller services were $27.376 billion , up 9% from $25.085 billion in the same period last year , and up 13% year-on-year excluding the impact of exchange rate changes.

After the earnings report was released, Amazon's chief financial officer   Regarding the issue of distribution and transportation, Brian Olsavsky said that distribution and transportation have always been Amazon's annual investment focus. It is estimated that about 40% of the funds this year will be used to improve storage capacity and transportation efficiency .

Amazon CEO Andy Jassy affirmed Amazon's market performance in the second quarter, saying that although inflationary pressures in fuel, energy and transportation costs persist, the company has made progress in a series of cost control measures proposed last quarter .

As of the end of the second quarter, Amazon had cut 99,000 employees to 1.52 million and stopped recruiting for some positions.

While inflation hasn’t caused consumers to cut spending significantly, it hasn’t been enough to restore growth in Amazon’s e-commerce business . Online sales fell 4% year-over-year in the quarter as consumers returned to physical stores, while physical store sales continued to rebound from the same period last year, up 12% .

Even before Amazon released its second-quarter earnings report, top U.S. retailers such as Target , Walmart and Best Buy announced a reduction in their second-quarter and full-year profit forecasts, which undoubtedly sounded the alarm for the retail industry that soaring inflation is affecting consumer spending.

Andrew Lipsman, principal analyst at eMarketer, said Amazon is supported by more middle- and upper-income consumers, while Walmart is strongly driven by lower-income consumers who are more sensitive to inflation.

DA Davidson analyst Tom Forte agreed , arguing that Amazon's core consumers are wealthier than Walmart's, and therefore could outperform Walmart in the current market crisis .

Amazon currently has a built-in consumer base of more than 200 million members, and these consumers are expected to buy more products. According to data from market research firm Consumer Intelligence Research Partners , Amazon Prime members tend to spend more and order more frequently than non-Prime members .

Amazon said that in the face of high inflation , Prime members so far do not appear to be abandoning their memberships to cut costs.

Amazon is optimistic about the coming months after second-quarter sales growth exceeded expectations . It said third-quarter sales are expected to be between $125 billion and $130 billion, up 13% to 17% , while Refinitiv data forecast Amazon sales of $126.4 billion.

In response, Amazon CEO Andy Jassy said he would continue to increase the growth momentum of his core retail business to a level that satisfies investors.

Amazon

Second quarter