Amazon Delivers Strong Sales In Q3

Amazon had an eventful third quarter, including its purchase of Whole Foods and announcing it would open a second headquarters. Sales continued to surge for the e-commerce giant as it looked ahead to the holiday season.

Net sales increased 34% to $43.7 billion versus the year-previous quarter, Amazon reported, including a $1.3 billion contribution from Whole Foods Market, which the company acquired in August. With the Whole Foods Market contribution and the $124 million favorable impact from year-over-year changes in foreign exchange rates excluded, net sales increased 29% versus the previous third quarter.

For the third quarter ended September 20, posted net income of $256 million, or 52 cents per diluted share, compared with net income of $252 million, or 52 cents per diluted share, in the 2016 period. Amazon’s earnings per diluted share fell short of a MarketBeat-published analyst average estimate of $1.09. Operating income slipped 40% to $347 million in the third quarter versus the period a year earlier. Third quarter operating income includes a $21 million contribution from Whole Foods Market.

Among recent business highlights Amazon noted that it had opened bookstores in Bellevue, WA, San Jose, CA, and Los Angeles, as well as a second location in New York. The company now has 12 Amazon Books locations operating across the U.S. with more stores planned, including Walnut Creek, CA, Washington, D.C., and Austin, TX.

Amazon also noted plans for Amazon HQ2, its second headquarters city in North America, where it expects to invest $5 billion and create as many as 50,000 jobs. Amazon said it has received 238 proposals from across North America for a headquarters location.

In its outlook for the fourth quarter, Amazon said its net sales are expected to be between $56 billion and $60.5 billion, or to grow between 28% and 38% compared with fourth quarter 2016. This guidance includes approximately 1,000 basis points of impact to its year-over-year growth rate from Whole Foods Market. The guidance also anticipates a favorable impact of approximately $1.2 billion or 270 basis points from foreign exchange rates.