Amazon saw sales revenue in Q2 of $88.9 billion, up an incredible 40.2% versus 2019, the company reported in its earnings call last week.
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Shipping costs in Q2 were $13.6 billion globally, up 68% from 2019, about 20 percentage points faster than on-line product sales growth. |
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That $88.9 billion includes all Amazon revenue, including its fast growing AWS web services unit. "Product sales, which includes not only its on-line sales but also revenue from its Whole Foods grocery store division, totaled $50.2 billion, also about 40% from Q2 2019. On-line stores only saw even faster growth, up 48% globally.
Profits were strong, with net income of $5.2 billion versus $2.6 billion in Q2 2019. That profit growth came despite some $4 billion in coronavirus related spending in the quarter, expenditures which included adding additional safety measures at the company's many fulfilment centers, purchasing personal protective equipment for its numerous workers, and paying a $500 million "thank-you bonus" to logistics and delivery workers.
As shown in the graphic below from the Wall Street Journal, Amazon's share of the US on-line retail market actually fell early in the quarter as it battled some fulfillment delays and for a period limited what products it would ship, but is now on the rise again, currently at just under 40% of the ecommerce market, dominating number 2 Walmart, which has about a 5% share.
Amazon's share price is up about 60% since March, adding more than $700 billion to its market value since its March lows. Its market capitalization now exceeds $1.5 trillion, behind only Apple and Microsoft among public companies.
Source: Wall Street Journal
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Other highlights from the earnings report include:
Fulfillment costs, which include fulfillment center expenses and some inbound logistics costs but not shipping, were $13.8 billion, up 50% from 2019, faster than the rise in product sales.
Shipping costs in Q2 were $13.6 billion globally, up 68% from 2019, about 20 percentage points faster than on-line product sales growth.
Amazon use to provide data on shipping revenue from its Amazon Prime subscription service and any shipping charges paid by customers so that a net shipping cost could be calculated, but unfortunately that information is no longer included.
Operating income increased to $5.8 billion in the second quarter, compared with operating income of $3.1 billion in second quarter 2019
Operating cash flow increased 42% to $51.2 billion for the trailing twelve months, compared with $36.0 billion for the trailing twelve months ended June 30, 2019.
Free cash flow increased to $31.9 billion for the trailing twelve months, compared with $25.0 billion for the trailing twelve months ended June 30, 2019.
In Q3, net sales are expected to be between $87.0 billion and $93.0 billion, or to grow between 24% and 33% compared with third quarter 2019.
Amazon said it expects to spend more than $2 billion during the third quarter on additional coronavirus-related measures, including procuring personal protective equipment, deep cleaning its facilities and wage increases for employees, among other actions.
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