After reporting subdued online product sales in its first quarter as cash-strapped consumers reined in their spending, Amazon has seen a pick in trade in recent months.
Over the quarter ended 30 June, the US giant saw sales in its Online Stores division increase 4% to $53.0bn. The uptick follows a push by Chief Executive Andy Jassy to make the company’s delivery network run faster and more smoothly, whilst trying to cut costs across the wider business.
The group’s overall sales rose 11% to a better-than-expected $134.4bn, driven by its AWS cloud computing business (+12%) and Advertising Service unit (+22%).
Amazon’s quarterly net profits came in at $6.7bn, up from a $2bn loss in the second quarter of 2022 and its biggest earnings in more than a year.
Jassy stated that the results showed “another strong quarter of progress”, adding: “We continued lowering our cost to serve in our fulfillment network, while also providing Prime customers with the fastest delivery speeds we’ve ever recorded.”
CFO Brian Olsavsky noted that the quicker delivery speeds had led to Prime customers “shopping more often”.
Amid signs that some countries are turning the corner on inflation, Amazon executives said consumers were still keeping a close eye on their budgets after the prelonged squeeze on their spending power.
Insider Intelligence’s principal analyst Andrew Lipsman noted that the upturn in Amazon’s e-commerce business was an “encouraging sign”.
Julian Skelly, Managing Partner at digital consultancy Publicis Sapient, added: “As ever, Amazon’s real strength comes from the breadth of its ecosystem.”
He added: “Looking forward, the signs of slowing inflation and broader growth in the market suggest that we can hope for better-than-anticipated performance in the second half of 2023.”
