Amazon Sees Surge in Sales Following Acquisition of Whole Foods

Dianna Christensen
October 28, 2017

Amazon who are now tipping millions moving into new markets including Australia, has seen their shares rise 7% after reporting a 35% lift in United States revenues and a 29% lift in global sales.

The world's largest online retailer said net income rose to $256 million, or 52 cents per share in the quarter ending September 30.

The Seattle company's revenue gains were thanks in part to its $13.7 billion acquisition of Whole Foods, which brought in $1.3 billion in sales during the three-month period. The company posted a slim profit of $256 million, or 52 cents per share, as costs rose 35 per cent.

In terms of Wall Street estimates, analysts are looking for EPS of ($0.01) on $42.25 billion in revenues.

Karen Short, an analyst who follows Amazon for Barclays, has been keeping close tabs on changes in Whole Foods stores since the merger, "given the widespread concern that food retail will be 'Amazon'ed, '" she writes in her most recent report.

The e-commerce giant's service sales growth (44%) outpaced its product sales growth (29%), notes Profitero vice president of strategy and insights Keith Anderson.

In its outlook for the fourth quarter, Amazon said its net sales are expected to be between $56 billion and $60.5 billion, or to grow between 28% and 38% compared with fourth quarter 2016.

Revenue from online stores increased by 22% to over $26.4 billion, which is the fastest growth seen by Amazon in that segment for over one year. Meanwhile, Amazon's global e-commerce business fared even worse, losing $936 million during the quarter.

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Amazon's Alexa-enabled devices remain a hit with customers.

"Customers have purchased tens of millions of Alexa-enabled devices..."

In addition, Bezos said active customers on Alexa-enabled devices are up five times over the same period a year ago.

"With thousands of developers and hardware makers building new Alexa skills and devices, the Alexa experience will continue to get even better".

Amazon's net sales rose 34% year over year, landing at $43.7 billion.

But Whole Foods Market's integration during the quarter didn't stop the new business from contributing operating income to Amazon's overall business. "Amazon owns and operates an ecosystem of platforms that reinforce each other internally and with customers", he said. The launch of new services like Amazon's unlimited music service in several European countries, and the rollout of Alexa services to India and Japan, have all taken their toll on the cost line.

Amazon's early Whole Foods initiatives included price reductions, selling whole Foods products on Amazon.com and installing Amazon Lockers at Whole Foods locations to drive foot traffic.

Other reports by GlobalViralNews

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