Holiday strength helps Amazon end quarter, year with double-digit growth

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SEATTLE—Amazon is crediting a “record-breaking holiday shopping season” for its strong fourth quarter and fiscal year performance.

Net sales for the quarter were up 14% to $170 billion compared with the fourth quarter in 2022. Adjusted for favorable foreign exchange rates, net sales were up 13% for the quarter, the same percentage growth experienced by North America sales, which hit $105.5 billion.

Net income rose to $10.6 billion for Q4, or $1 per diluted share. Operating income for the quarter came in at $13.2 billion compared with $2.7 billion the previous year’s Q4.

“This Q4 was a record-breaking holiday shopping season and closed out a robust 2023 for Amazon,” said CEO Andy Jassy. During the earnings call, Jassy pointed out that “customers responded to our continued focus on selection, price and convenience. Being sharp on price is always important but particularly in an uncertain economy, where customers are careful about how much they’re spending.

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Jassy pointed to several key metrics for Amazon, such as regionalization of its U.S. fulfillment network, which led to fastest-ever delivery to Prime members; new AI capabilities such as Bedrock, Q and Trainium; and improvements in advertising services, which was up 26% year-over-year.

“While we made meaningful revenue, operating income and free cash flow progress, what we’re most pleased with is the continued invention and customer experience improvements across our businesses,” he said.

“As we enter 2024,” Jassy said, “our teams are delivering at a rapid clip, and we have a lot in front of us to be excited about.”

For the full year, net sales rose 12% to $574.8 billion. North America sales were also up 12% year-over-year to $352.8 billion. Fiscal year operating income was $36.9 billion, and net income for the year ended at $30.4 billion, or $2.90 per diluted share. Operating cash flow for the trailing 12 months was up 82%, reaching $84.9 billion.

Looking ahead, Amazon’s guidance for the first quarter of 2024 shows net sales between $138 billion and $143.5 billion, which translates to 8% to 13% growth over Q1 2023. Operating income is expected to be $8 billion to $12 billion, which compares with $4.8 billion in Q1 2023.

Amazon sold more than 1 billion items during its 11 days of deals in 2023, and throughout the holiday season, customers purchased more on Amazon than any previous holiday.

Among other highlights from the year were the introduction of Rufus, a generative AI-powered conversational shopping experience, and the launch of Sequoia, a robotic inventory system that helped cut order processing time by 25%.

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