Despite the dismal retail environment, Amazon.com posted results that beat expectations for the second consecutive quarter. And, even more surprising to many, the retailer managed to accomplish that feat without resorting to price discounts.
Amazon continues to benefit disproportionately from the general shift to online commerce and the careful shopping behavior that consumers are exhibiting during the downturn. The breadth of the products it offers through independent merchants and its own expansion into new categories, along with low-priced shipping in the U.S. and abroad, continues to woo shoppers.
First-quarter revenue jumped 18 percent to $4.89 billion, from $4.13 billion a year ago, surpassing the 15 percent growth that analysts had been expecting. The company posted net income of 41 percent a share for the quarter, 10 percent higher than analysts’ average forecast.
This accelerated growth is helping Amazon grab an even larger share of the retail market than analysts have been expecting. It’s far outstripping the 2.7 percent growth in the U.S. and 9.6 percent growth overall that Jeffery Lindsay, an analyst at Bernstein Research, forecasts for the year for e-commerce. And it compares with the 0.5 percent decline that the National Retail Federation is expecting for traditional U.S. retailers.
Second-Quarter Guidance Surprisingly Low
“It was a strong quarter,” says Colin Sebastian, an analyst at Lazard Capital Markets. “Amazon continues to take market share and they continue to be a favored outpost for consumers who are looking for good value.”
Amazon was able to offer that value without giving away the store. The operating margin, a measure of profitability, was also better than expected. At 5 percent, it was well above Wall Street’s expectations of 4.3 percent. And despite the difficult economy, Amazon showed better-than-expected growth in its domestic sales of books, CDs, and other media as well as strong demand for electronics gear. It’s likely…