Amazon posts jump in retail sales along with profit slumpJuly 28, 2017 - 19:34 AMT PanARMENIAN.Net - Amazon.com Inc on Thursday, July 27 reported a jump in retail sales along with a profit slump, as its rapid, costly expansion into new shopping categories and countries showed no sign of slowing, according to Reuters. The world's largest online retailer posted second-quarter revenue of $38 billion, up 25 percent from a year earlier. The breakneck growth stood in contrast to the fate of many brick-and-mortar rivals, who have struggled to find their footing as more people shop online. Yet Seattle-based Amazon posted a 77 percent drop in quarterly income, and even said it could lose up to $400 million in operating profit during the current quarter. Beyond reflecting retail's notoriously thin margins, the forecast signaled Amazon would invest heavily to maintain its dominance. Shares - up nearly 40 percent this year - fell 3.2 percent to $1,012.68 in after-hours trading. The company had earned 40 cents per share instead of $1.42 as analysts had expected, according to Thomson Reuters I/B/E/S. "Q3 is generally a high investment period," Chief Financial Officer Brian Olsavsky said on a call with reporters, citing spending on fulfillment and hiring to prepare the company for the Christmas holiday rush. He added, "Our video content spend will continue to grow, both sequentially and quarter over quarter." Indeed, investing in faster shipping and video has become a refrain of sorts for the company. While some expected Amazon's spending in these areas - stepped up since last year - to ease, the company is plowing ahead to reinforce its fast-shipping club Prime. Olsavsky said video content included with Prime membership has helped Amazon retain subscribers and persuade those on a free trial to sign up for $99 per year in the United States. A cornerstone of the company's strategy, Prime encourages shoppers to buy more goods, more often from Amazon. Subscription sales including Prime fees rose 51 percent in the second quarter to $2.2 billion. Cowen & Co analysts have estimated that more than 50 percent of U.S. households will have Prime membership by the end of 2017. "The fact that they are investing on so many fronts right now just speaks to the opportunity that they have before them," said Edward Jones analyst Josh Olson. "We are giving them the benefit of doubt here because they have executed so well historically." Top stories Yerevan will host the 2024 edition of the World Congress On Information Technology (WCIT). Rustam Badasyan said due to the lack of such regulation, the state budget is deprived of VAT revenues. Krisp’s smart noise suppression tech silences ambient sounds and isolates your voice for calls. Gurgen Khachatryan claimed that the "illegalities have been taking place in 2020." Partner news Most popular in the section | European Parliament to discuss repression in Azerbaijan The European Parliament will discuss repression of civil society in Azerbaijan on April 24 PACE wants concessions from Azerbaijan to accept Baku back A PACE co-rapporteur said that Azerbaijani authorities must make certain concessions so that the country can return to PACE. Cyprus parliament honors Armenian genocide victims Acting House President Zacharias Koulias noted that April 24 marks the “black anniversary” of the Armenian genocide. Armenia PM, France envoy discuss regional matters Issues related to the consistent development of Armenia-France cooperation were discussed. |