
Amazon.com Announces Third Quarter Sales Up 34% to $43.7B - runesoerensen
http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=2311821
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jedberg
That was me and my wife. I'm pretty sure our baby stuff accounts for most of
that growth.

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vidarh
Do you know Amazons order page lets you see how many orders you place each
year?

It is quite telling: 2007, 2008, 2009 were <10 orders. Then 2010, after my son
had been born: 41. 2011: 98. 2012: 138.

2016: 270...

It's all about establishing the habits.

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mrb
They also have a page to generate CSV reports on your purchases. I noticed the
wife and I spent well over $10k in last 12 months. Up 2× or 3× since last
year!

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simonbarker87
Where abouts is that page? Do you have a URL?

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social_quotient
Here is a url

[https://www.amazon.com/gp/b2b/reports](https://www.amazon.com/gp/b2b/reports)

What a really great feature and cheers to amazon for having something like
this available.

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lorenzhs
Too bad this doesn't seem to work for amazon.de, .co.uk, and probably others.
I'd love to get a report like that.

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austenallred
Wow. How is that even possible?

Growing by a third in one year at that scale is completely mind boggling to
me.

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newobj
International, and unclear if subsidiaries like WFM come into play in this?

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adventured
They note in the release that Whole Foods accounted for $1.3 billion in sales.
Excluding Whole Foods sales and favorable exchange rates, growth was 29%.

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twoodfin
Haven’t followed the numbers closely, so pretty shocked that WF is only
pulling in $1.3B/quarter. That means the average American household is
spending $3-4/month there.

Plenty of room to grow!

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runako
WF has < 500 stores, slightly more than the number of Apple stores. People
will travel further distances to buy an iPhone than perishables.

Apple stores also draw in people for repairs, etc. via their online presence
(e.g. buy online, pick up in store). WF is 100% in-store.

It's astonishing WF is able to generate this level of revenue on so relatively
few stores.

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rgbrenner
Once again, AWS is the reason Amazon made any money at all. AWS earned $1.1B
in profits for the quarter.. a 25% profit margin.

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alehul
Correct me if I'm wrong, but isn't that just due to their accounting
preferences?

Amazon has had the capability of making profit for years, but prefers to
expense everything off in an effort to grow rather than pay increased taxes.

Their skyrocketing market cap hasn't been due to a change in the company's
direction so much as investors gradually realizing this strategy and the raw
growth potential of where Amazon has positioned itself.

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samfisher83
You can't just expense stuff like that. For example you buy a warehouse you
can't depreciate it all in one year. Retail is a competitive low margin
business. Amazon has always had crazy P/E ratio. I could never really
understand it. Maybe I could understand aws, but I can't understand the
valuation of the core amazon business. Suppose amazon grows to the size of
walmart. Walmart is only worth 260B, and they generate a ton more cash than
amazon.

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wahern
Company A grows revenues at %5 per annum. Company B grows revenues at %4.9 per
annum. In both cases the trend is equally likely to continue in perpetuity.
And neither company is expected to ever pay dividends.

Which stock are people going to buy? _Everybody_ is going to buy Company A's
stock and _nobody_ is going to buy Company B's stock. P/E doesn't matter
because 1) no dividends and 2) it's not a proxy for relative risk (we
established risk is identical between the two).

Amazon is special because it's potential for revenue growth is believed to be
nearly unlimited. As long as they're not losing money, and as long as they
have enough profits to continue growing revenue, people will keep investing.
Once the specter of stagnant revenue growth appears, Amazon's stock will
probably come crashing down.

Basically, investors chase revenue growth, not profits. Berkshire Hathaway
works the same way. Buffet might be a value investor who buys companies that
can grow profits, but the price of BRK.A tracks the revenue growth of the
holding company, not its profits.

Conversely, Wal-Mart's revenue growth has completely stalled. In fact, the
stock price plummeted the year that revenue decreased slightly.

This is how things look as far as I can tell. I'm not a financial
professional, and even if I'm right I'm sure there's a far better way (more
technical, more comprehensive) to explain this dynamic.

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samfisher83
Walmart is a 500 billion dollar company. Even 1% growth is 5 billion in
revenue. They are asymptotic to the US economy growth which isn't growing
much.

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wahern
But the point is that the absolute figures don't matter themselves. Investors
chase revenue growth.

The huge absolute revenues of Wal-Mart do suggest that revenue growth
opportunities are structurally limited by the size of the domestic economy.
But then again, unless and until every brick & mortar store in the U.S. says
"Wal-Mart", they could still grow. That sounds unreasonable, but it's
basically how people see Amazon: capable of growing revenues in large part by
capturing existing markets, and being able to do that for the foreseeable
future.

You said you could never understand why Amazon attracts so much investment
despite their P/E and despite the poor margins of the retail industry. I
realize you probably said that rhetorically, but in any event my point was
simply that profit margins don't matter; what attracts investment is revenue
growth. I'm sure there are many reasons--some rational (the corollary of
revenue growth is growing marginal profit _potential_), some not--but it is
what it is. And it's pretty much how investment has always worked.

Indicators like P/E only matter because of what they signal about future
revenue growth. A poor P/E often suggests poor capacity for growing revenue.
It's a heuristic, and if more direct evidence gives you reason to believe
otherwise then you discount the predictive value of the P/E metric
accordingly.

I suppose another way of looking at it is that Wal-Mart is at the phase where
they're capturing profits, not growth. Their profit taking years were priced
into their stock during the growth period; as they grew revenue their
potential for future profits grew and this was immediately reflected in their
stock price. If you look at the financial graphs, their stock price has
remained steady with their revenue. When overall revenue declined the stock
price dropped sharply, because revenue decline implies a decline in future
profits and markets will quickly price future prospects into today's stock
price. So in the language of "fundamentals" investing, profits are ultimately
what matter; but _future_ profits, not today's profits. Future profits is just
another way of saying profit potential; and the best indicator of profit
potential is today's revenue growth.

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megadethz
Amazon is proving to be a vacuum cleaner for inefficiencies in the economy.
"Your margin is my opportunity" in another light.

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adventured
For AWS - 41.7% year over year sales growth (to $4.58b), 44% increase in
operating expenses, 36% increase in operating income (to $1.17b).

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Uehreka
_rushes to EC2 Instances dashboard_ Aw shoot, I never actually shut down that
P2 cluster!

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pfarnsworth
Wow. 34%? How does that happen at a company of that scale? That's simply
incredible, they are hitting it out of the park like Apple and Google, FANGs
are dominating this world at this stage.

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Chris911
The stock is up 7.5% in after hours trading.

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0xFFC
I am very curious about Wallmart policies against Amazon growth. With this
pace amazon will eat Wallmart eventually. And Wallmart is biggest company on
earth. What they are going to do?

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bognition
In many ways amazon has already eaten walmart. In what way is walmart the
biggest company on the earth?

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pwinnski
Walmart isn't the biggest company on earth by most means.

Last quarter, Walmart reported $31.8B profits on $123.4B earnings. For the
similar quarter, Amazon reported $14.5B profits on $38.0B earnings. So Walmart
dwarfed Amazon overall.

Amazon's fresh results are great, and it helps to close the gap between them,
but they are still much smaller than Walmart.

Unless you're talking online-only, in which case the comparison switch around,
and Amazon is already much bigger than Walmart. But Walmart's online sales are
a small percent of their earnings.

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davidkuhta
So, how much do they have to spend to stay "zero-profit"?

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gok
"Operating income decreased 40%"

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kgwgk
Operating margin has collapsed from 1.8% to 0.8% (adjusting for Whole Foods
doesn't change the result).

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gok
If you exclude AWS, it's -2.1%, from -0.9% a year ago

