Ecommerce giant Amazon (NASDAQ: AMZN) finished 2019 strong, reporting impressive fourth quarter and year-end results last week due, in part, to strong holiday sales. Amazons net sales for the quarter increased by 21% to $87.4 billion, compared to $72.4 billion for Q4 2018. Net income increased to $3.3 billion, or $6.47 per diluted share, compared to $3.0 billion, or $6.04 per diluted share, in the prior year quarter. For the full year, net sales were up 20% to $280.5 billion, compared to $232.9 billion in 2018. Net income for the full year was $11.6 billion, or $23.01 per diluted share, compared to $10.1 billion, or $20.14 per diluted share.
Prime membership continues to get better for customers year after year. And customers are responding – more people joined Prime this quarter than ever before, and we now have over 150 million paid Prime members around the world, said Jeff Bezos, Amazon founder and CEO, in a January 30 news release.
Weve made Prime delivery faster – the number of items delivered to U.S. customers with Primes free one-day and same-day delivery more than quadrupled this quarter compared to last year. Members now have free two-hour grocery delivery from Amazon Fresh and Whole Foods Market in more than 2,000 U.S. cities and towns. Prime members watched double the hours of original movies and TV shows on Prime Video this quarter compared to last year, and Amazon Originals received a record 88 nominations and 26 wins at major awards shows, added Bezos.
Here are some other highlights from the quarter:
– During the holiday season, customers bought tens of millions of Amazon devices including Echo Dot, Fire TV Stick 4K with Alexa Voice Remote and Echo Show 5.
– Independent third-party sellers sold more than 1 billion items during the holiday season, including more than 100 million items that were shipped via Prime Free One-Day Delivery.
– Prime members now get Amazon Fresh delivery for free with orders over $35. Previously, they were charged a monthly subscription fee of $14.99 for the service.
– Fire TV has more than 40 million active users around the world.
– Prime Video received eight Golden Globe nominations with Fleabag winning for best TV series, and Phoebe Waller-Bridge won best performance by an actress in a TV series.
– Amazon Music has over 55 million customers worldwide, and Amazon Music Unlimited subscribers grew more than 50% last year.
– Amazon made returns easier by accepting returns at more than 18,000 drop-off locations in the U.S., including Amazon hubs, Kohls, select Whole Foods Market stores and UPS.
– Amazon released new products just for kids, including Fire HD 10 Kids Edition, Kindle Kids Edition and Echo Glow.
– Last year, authors earned more than $300 million from the Kindle Direct Publishing (KDP) Select Global Fund, totaling more than $1.1 billion since the launch of Kindle Unlimited, Amazons unlimited reading subscription.
– Amazon donated more than 5,000 blankets, sheets and pillows; over 30,000 toys and educational items for kids; more than 40,000 clothing items; and more than 60,000 pantry items to U.S. charities during the holiday season.
– AWS grew its customer base with new commitments and migrations that include Western Union, FINRA, CAT and Kiarna.
– AWS announced many new services and capabilities.
Amazons fourth quarter wasnt entirely without problems. Following record-breaking holiday sales during the Thanksgiving to Cyber Monday weekend, there were many delivery delays. Frustrated customers took to social media to share their frustrations and concerns. Amazon blamed the delays on high demand and winter weather.
Based on its 2019 results and anticipated first quarter results for 2020, Amazon provided the following guidance for the first quarter:
– Net sales between $69.0 billion and $73.0 billion, increases of 16% and 22% respectively
– Operating income between $3.0 billion and $4.2 billion, down from $4.4 billion in Q1 2019
Whether or not you are a fan of Jeff Bezos or big business, there is no doubting that Amazon continues to be successful. From a subscription perspective alone, Amazon continues to attract new Prime members and to retain existing ones by adding new products and services. Amazon doesnt always deliver on its promises (pun intended), but it is quick to rectify significant systemic problems. The growth of Amazon Music is impressive, particularly since it does not seem to get the attention or respect that services like Apple Music and Spotify get. Based on Amazons first quarter outlook, net sales are expected to be up, but operating income – and probably net income – will be down. That wont stop Amazon from having a good year though.