Amazon's 'Conservative Assumptions' About Christmas Sales

24 October 2008

SEATTLE: Amazon, the world's biggest online retailer, boosted revenues by 33% in the third quarter to $4.26bn (€3.3bn; £2.6bn). It is, however, adopting "appropriately conservative assumptions" about Q4 prospects following slower sales at the end of last month, says cfo Tom Szkutak

The internet giant's total earnings rose by 48% in Q3 to $118m, but the company also saw a drop in the number of purchases worth over $1,000 at the end of September, as consumer spending slowed.

It now estimates that the total value of fourth quarter sales will fall between $6bn and $7bn, the former representing growth of 6% year-on-year, and the latter an upswing of 23%. 

International sales took 46% of all revenues (up slightly year-on-year) in the third quarter, with "non-media" items like electrical goods also posting a rise of 5% to account for 38% of overall income. 

The company's recently launched electronic book reader Kindle was responsible for some 10% of book sales where literature was available in both print and digital format. 

Market analystics firm Forrester Research estimates that online sales will grow in value by 12% to $44bn in November and December, whereas the National Retail Federation predicts total retail growth of 2.2%, the slowest since 2002.

Data sourced from Financial Times; additional content by WARC staff