In the first quarter, Amazon drove sales and earnings past Wall Street expectations as each of its major divisions showed gains and new plans got underway, including the development of a new Whole Foods Market store concept.
Net income increased to $10.43 billion, or 98 cents per diluted share, compared with $3.17 billion, or 31 cents per diluted share, in the 2022 first quarter.
Amazon topped a MarketBeat analyst consensus estimate for 83 cents per diluted share and revenues of $142.65 billion.
Net revenues increased to $143.31 billion from $127.36 billion in the year-earlier quarter, the company reported. Net product sales were $60.92 billion and net service sales were $82.4 billion versus $57 billion and $70.38 billion year over year.
North American segment sales advanced 12% in the quarter year-over-year to $86.34 billion, while AWS segment sales gained 17% to $25.04 billion. International segment sales increased 10% year-over-year to $31.94 billion in the period, or increased 11%, excluding changes in foreign exchange rates.
Operating income increased to $15.31 billion from $4.77 billion in the year-prior quarter, Amazon stated. North America segment operating income was $5 billion versus $900 million in the 2023 period, while AWS segment operating income was $9.42 billion versus $5.12 billion. International segment operating income was $900 million versus an operating loss of $1.25 billion in the 2023 quarter.
Highlights of the quarter included, according to Amazon:
- Running shopping events worldwide, which included the first Big Spring Sale in the United States and Canada when customers saved on a wide selection of items, including fashion, outdoor furniture, lawn and garden essentials, and cleaning and organizing products, as well as Spring Deal Days in Europe.
- Making Buy with Prime available to Salesforce Commerce Cloud merchants.
- Extending the rollout of Rufus, a new generative AI-powered shopping assistant in the Amazon Shopping app, to millions of consumers in the U.S. who can use it to save time and make more informed purchase decisions by getting answers to shopping-related questions, product comparison inquiries and requested recommendations.
- Launching a grocery subscription offer for unlimited delivery on orders over $35 from Whole Foods Market and Amazon Fresh, as well as local grocery and specialty retailers.
In a conference call, Andy Jassy, Amazon president and CEO, noted that the company is launching a smaller version of Whole Foods Market. The new concept, Whole Foods Market Daily Shop, debuts in Manhattan, NY, later this year to give urban consumers a quick and convenient way to shop a curated assortment of products in their own neighborhoods. Plans call for the initial expansion of the concept to occur in New York City.
Jassy, in the call, emphasized advancements in delivery, saying that 60% of Prime members’ orders arrived the same or next day across Amazon’s top 60 largest U.S. metro areas, and consolidation, where more than one ordered item is delivered in the same box, which reduces cost and lowers the company’s carbon footprint. He also spotlighted Amazon’s advertising growth, saying that sponsored product marketing, supported by continued improvements in relevancy and measurement capabilities for advertisers, was especially important in driving a strong performance.
Jassy said that Amazon plans to continue placing an emphasis on adding still more items to the selection of products available through its website. For sellers, the company has added a GenAI tool that creates high-quality product detail pages based on just a URL link.
In announcing the financial results, Jassy said, “It was a good start to the year across the business, and you can see that in both our customer experience improvements and financial results. The combination of companies renewing their infrastructure modernization efforts and the appeal of AWS’s AI capabilities is reaccelerating AWS’s growth rate, now at a $100 billion annual revenue run rate. Our store business continues to expand selection, provide everyday low prices, and accelerate delivery speed, setting another record on speed for Prime customers in Q1 while lowering our cost to serve. And our advertising efforts continue to benefit from the growth of our stores and Prime Video businesses. It’s very early days in all of our businesses, and we remain excited by how much more we can make customers’ lives better and easier moving forward.”
