Amazon.com, Inc. (NASDAQ: AMZN) stock lost over 3.7% on February 1st, 2019 (as of 11:41 am GMT-5; Source: Google finance) as the company forecasted first-quarter sales below Wall Street estimates as new regulations in India created uncertainty around one of its key growth markets, dimming the online retailer’s report of record holiday season profit. Amazon posted a 63 per cent rise in net income to US$3.03 billion for the fourth quarter, ahead of analysts’ estimates.
AMZN in the fourth quarter of FY 18 has reported the adjusted earnings per share of $6.04, beating the analysts’ estimates for the adjusted earnings per share of $5.67. The company had reported the adjusted revenue growth of 19.7 percent to $72.38 billion in the fourth quarter of FY 18, beating the analysts’ estimates for revenue of $71.87 billion. The revenue grew on the back of a strong holiday season, which includes the major US shopping event Black Friday.
Moreover, during the fourth quarter, Amazon had invested in helping selling partners increase their sales in the stores, including introducing a USPS Priority Mail Cubic ship method for Seller Fulfilled Prime and merchant fulfilled sellers, which offers a lower cost, volume-based pricing ship option. The company launchd a new FedEx One Rate, a weight agnostic ship method that enables sellers to fulfill Prime orders nationwide; and reducing Fulfillment by Amazon storage fees in the U.S., EU, and Japan. During the holiday season alone, tens of millions of customers worldwide had started Prime free trials or began paid memberships. More customers signed up for Prime worldwide in 2018 than ever before. Small and medium-sized businesses had their best holiday season ever in Amazon’s stores. More than 50% of units sold in Amazon’s stores this holiday season came from small and medium-sized businesses. Third-party sales are growing faster than first-party sales, and nearly 200,000 small and medium-sized businesses surpassed $100,000 in sales in Amazon’s stores in 2018.
Meanwhile, AMZN launched Amazon Pop-Up stores to customers in six countries across Europe during the holiday season. For the first time, Amazon presented a curated selection of over 2,000 products and carried out 136 events and workshops for its customers in Amsterdam, London, Madrid, Milan, Berlin, and Paris. This was the biggest holiday shopping season ever for Amazon devices, with customers purchasing millions more devices compared to the 2017 holiday shopping season. The all-new Echo Dot was the #1 selling product on Amazon globally, from any manufacturer, in any category this holiday season.
The company forecast net sales of between US$56 billion and US$60 billion for the first quarter, missing the analyst average estimate of US$60.77 billion, according to IBES data from Refinitiv. The company said it’s expecting an unfavorable impact of about 2.10 percentage points from foreign-exchange rates.