Amazon accounts for about 52% of all online retail sales in the U.S. and its performance acts as a barometer for total online sales growth for the United States.
The most recent sales report for Amazon was for Q1 (January to March) 2019. Net sales increased 17% to $59.7 billion in the first quarter, compared with $51.0 billion in first quarter of 2018. Gone are the days when Amazon was growing at 200%, 100% or even 40%. The base is inevitably large now but what really is happening at Amazon?
Chart 1: E-Commerce Retail Sales as a Percent of Total Sales
E-Commerce retail sales are now 9.8% of total retail sales (at the end of Q3 2018). Amazon is estimated to be 50% of all E-Commerce sales in the U.S. which would mean Amazon accounts for around 5% (or $1 in every $20 spent) of all retail sales in the U.S.
The S & P 500 and the NASDAQ 100 hit all time highs in early October and since then they have fallen about 10% each. The S & P 500 has turned negative for the year and the NASDAQ 100 has barely moved. FAANG (Facebook, Amazon, Apple, Netflix and Google/Alphabet) stocks accounted for almost all the 2018 gains until October. And their fall has caused the market meltdown but there is more to the story …
Amazon declared its Q3 results on Thursday, Net sales increased 29% to $56.6 billion in the third quarter, compared with $43.7 billion in the third quarter of 2017. Excluding the unfavourable impact of foreign exchange rates throughout the quarter, net sales increased 30% compared with third quarter 2017.
Operating income increased to $3.7 billion in the third quarter, compared with operating income of $347 million in the third quarter of 2017.
Amazon’s share price has soared 500% in the past four years despite the recent 20% fall in the share price.
Restricted Stock Units (RSU) are company stock (or shares by another name) granted to employees as a form of compensation. Employers save some tax, and it generally aligns the long-term interest of employees (and shareholders) as it normally carries a vesting period. 2017 was great for technology company share prices and technology companies granted an eye-watering amount of Restricted Stock Units by value leaving banks way behind …