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Amazon Sales Grow but Profits Slide

News, 28 April 2005

Heavy discounts and expensive promotions have chipped away profits at online retailer Amazon.

The company's first quarter sales increased by 24% over the same period last year to $1.9bn (€1.4bn, £997m) - but net income fell 30% to $78m.

Amazon is now forecasting total 2005 sales of between $8.175bn and $8.675bn, and net income between $395m and $510m.

Sales growth was particularly strong in the international division, which encompasses UK, German, Japanese and Chinese sites, and accounted for 45% of group takings over the past year.

The company says it is continuing to see "strong interest" from retailers wanting to use its service arm to develop and operate their own-brand websites, as recently agreed with UK chain Marks & Spencer.

Amazon also announced Wednesday it had formed a new partnership US department store chain Macy's, to sell branded clothing, home and other goods and accessories via its website. It has similar sales partnerships in the US with a variety of other retailers.

Data sourced from Financial Times Online; additional content by WARC staff