Amazon.com goes back into the red

By : |April 25, 2002 0



Amazon.com’s brief contact with profitability ended after just one quarter as
first-quarter losses totaled $23 million, down from $234 million a year ago.
Sales grew 21 per cent to $847 million from $700 million. The Seattle-based
online retailer said it expects second quarter, saying it expects sales of $765
million to $815 million, 22 per cent more than the same period last year. But a
net loss is again expected.

‘We are ahead of schedule financially. Our continued operational progress and
momentum allow us to further lower prices for customers and at the same time
increase our 2002 guidance,’ said chief financial officer Warren Jenson.

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Jenson added that the company’s new 30 per cent discount on books over $20 is
working so well, the program will soon be extended to books costing $15 or more.
Jenson credited the better operations to a combination of more customers — many
attracted by free shipping on orders over $99 — as well as more sales of
high-margin used items and ongoing efficiency gains.

Sales in Amazon’s core books, music and video segment, rose 8 per cent to
$443 million. Sales from stores in Britain, Germany, France and Japan that make
up Amazon’s international segment, rose to $225.5 million, up 71 per cent from a
year earlier. Electronics, tools and kitchenware sales rose 8 per cent to $126.2
million, while services, a small but high-margin business for Amazon, rose 25
per cent to $52.7 million.

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