Amazon, which announced two initiatives this week to improve speed to market and package security, posted a strong sales gain in the third quarter, while income improved slightly.
In a Nutshell: Amazon, which acquired Whole Foods Market on Aug. 28, saw a spike in net sales in the quarter, while net income rose slightly. The two companies together will pursue the vision of making high-quality, natural and organic food affordable for everyone. Upon closing, Whole Foods Market began offering lower prices on a selection of best-selling grocery staples across its stores, with more to come.
On the logistics side, this week Amazon introduced Amazon Key, a new service exclusively for Prime members that enables in-home delivery and secure home access for guests and service appointments. Amazon Key works with Amazon Cloud Cam, the company’s first home security offering. Amazon Business launched Business Prime Shipping, offering unlimited free two-day shipping for multi-user business customers in the U.S. and Germany. Amazon Business also expanded to Japan and India, and now serves businesses of all sizes in five countries across the globe.
[Read more about Amazon Business: Amazon’s New ‘Business Prime’ Could Give Small Businesses Even Greater Speed to Market]
Sales: Net sales for the third quarter ended Sept. 30 increased 34 percent to $43.7 billion compared with $32.7 billion in year-ago period. Net sales includes $1.3 billion from Whole Foods Market, which Amazon acquired on Aug. 28. Excluding Whole Foods Market and the $124 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 29 percent compared with third quarter 2016.
Earnings: Net income was $256 million in the third quarter compared with net income of $252 million a year earlier. Operating income decreased 40 percent to $347 million in the quarter from $575 million in third quarter 2016. Operating income includes income of $21 million from Whole Foods Market.
CEO’s Take: Jeff Bezos, chief executive officer, said, “In the last month alone, we’ve launched five new Alexa-enabled devices, introduced Alexa in India, announced integration with BMW, surpassed 25,000 skills, integrated Alexa with Sonos speakers, taught Alexa to distinguish between two voices, and more. Because Alexa’s brain is in the AWS cloud, her new abilities are available to all Echo customers, not just those who buy a new device. And it’s working—customers have purchased tens of millions of Alexa-enabled devices, given Echo devices over 100,000 five-star reviews, and active customers are up more than five times since the same time last year. With thousands of developers and hardware makers building new Alexa skills and devices, the Alexa experience will continue to get even better.”