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What you need to know: This weblog captures key data points about the global telecoms industry. I use it as an electronic notebook to support my work for Pringle Media.

Friday, October 26, 2018

International Operations Drag Down Amazon

Amazon reported a 30% year-on-year increase in net sales to 56.6 billion US dollars in the third quarter, on a constant currency basis. It forecast net sales will be between 66.5 billion and 72.5 billion dollars in the current quarter, representing an increase of between 10% and 20% compared with fourth quarter 2017. This guidance anticipates an unfavourable impact of approximately 80 basis points from foreign exchange rates.

In the third quarter of 2018, there was a marked slowdown in Amazon's international business, where sales grew just 13% compared with 29% a year ago. Sales at AWS were up 46%, compared with 42% a year ago, while sales growth in North America was 35% - the same as in the third quarter of 2017. 

Brian T. Olsavsky, CFO of Amazon.com, said: "We did the Souq acquisition last year in May. So the full pickup on that year-over-year was in 2017 and now we're lapping that. There's also material change in the Diwali calendar in India. About half of our Diwali sales last year were in Q3. This year they'll be fully in Q4. So those are a couple factors that hit the international growth area in particularly."

Explaining the cautious fourth quarter guidance,  Olsavsky added: "Whole Foods.. was purchased in August of last year and that has impacted every quarter since then, Q4 will be the first solid non-Whole Foods comp since before we bought them since Q2 of last year." Source: Amazon statements

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