Amazon’s July 27, 2017 results put a striking retail event beside a less celebratory operating result. Net sales for the second quarter rose 25% year over year to $38.0 billion ($30.4 billion a year earlier); excluding currency effects, the increase was 26%. Yet operating income fell 51% to $628 million from $1.3 billion, and net income was $197 million, against $857 million a year earlier. Sales growth, in other words, did not translate into higher quarterly income. [story-s1]
Separately, the release described the scale of the company’s third annual Prime Day. Amazon said it was its biggest global shopping event to date, with more new Prime members joining that day than on any previous day. Hundreds of thousands of small businesses and entrepreneurs participated and sold more than 40 million units. Amazon also reported record device sales, including the Echo Dot as its best-selling product across categories on its global site. These are company-reported measures, not an independent assessment of profitability or seller outcomes. [story-s1]
The release therefore captures two different tests for a retailer expanding its event-driven commerce: attracting shoppers and sellers at scale, and converting that activity into earnings. Amazon reported a record Prime Day event alongside quarterly operating income and net income that were lower than a year earlier. The release does not isolate Prime Day’s costs or contribution, so it cannot establish that the event caused the profit decline. It does show why a record sales event alone was not a complete measure of the quarter’s performance. [story-s1]
Source documents
- Amazon.com Announces Second Quarter Sales up 25% to $38.0 Billionhttps://ir.aboutamazon.com/news-release/news-release-details/2017/Amazoncom-Announces-Second-Quarter-Sales-up-25-to-380-Billion/default.aspx