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Supply Chain News: A Look at Amazon’s Blowout Q1 Result

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Revenue Jumps 44% versus 2020, while Making Real Money

 
May 4, 2021
SCDigest Editorial Staff
     

The good times roll on for Amazon, with a blowout first quarter that exceeded the analysts’ already lofty expectations.


Supply Chain Digest Says...

 

fter Walmart reports its offset Q1 results, we’ll soon have our annual and very popular Walmart and Amazon by the Numbers feature.

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In its Q1 earnings release published late last week, Amazon said its revenue grew a massive 44%, taking it to $108.52 billion, as it continues to narrow the gap between itself and number 1 Walmart for title of world’s largest retailer.

And the company once criticized for fast revenue growth with little or negative profit now has learned how to make real money.

Amazon had net income of $8.1 billion dollars, a very respectable 7.4% of revenues, and way up from profits of $2.5 billion in Q1 2020.

Amazon also had operating income of 8.2% of revenues, the largest by far in its history. Operating income increased to $8.9 billion in the first quarter, compared with operating income of $4.0 billion in first quarter 2020.

The cash flow story was also strong. Operating cash flow increased 69% to an incredible $67.2 billion for the trailing twelve months, compared with $39.7 billion for the trailing twelve months ended March 31, 2020.

Free cash flow increased to $26.4 billion for the trailing twelve months, compared with $24.3 billion for the trailing twelve months ended March 31, 2020.

Amazon expects things to slow down a little, estimating Q2 revenues to be between $110.0 billion and $116.0 billion, or to grow between 24% and 30% compared with second quarter 2020. However, that would be a very small rise versus the Q1 revenue number, for reasons not clear.

Other Q1 results for Amazon worth noting include:

• Gross margin was 42.5%

• Fulfillment costs, which do not include shipping, were $16.5 billion, up 43% versus 2020, just about equal to revenue growth

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• International revenue surged 60% to $30.6 billion

• Its AWS web services unit had revenues of $13.5 billion, growing 32%.

• On-line store sales grew 44%, while sales at physical stores, mostly its Whole Foods unit, saw a decline of 16%.

• Shipping cost rose 57% to $17.1 billion, much faster than the growth in sales of 44%; Amazon a couple of years back stopped providing shipping revenues, making it impossible to understand net shipping costs

• Amazon incredibly grew the square footage of its US fulfillment and other logistics facilities by 50% in 2020, off an already huge baseline

• Amazon noted that Same-Day Delivery in as fast as five hours is free on orders over $35 on over three million items in select cities. This is in addition to Free Same-Day Delivery on millions of items in thousands of cities and towns across 47 major US metro areas, plus over 10 million items available for Free One-Day Delivery coast to coast.

So there you have it, Amazon’s fantastic Q1 results. After Walmart reports its offset Q1 results, we’ll soon have our annual and very popular Walmart and Amazon by the Numbers feature.


What do you think of Amazon's Q1 results? Let us know your thoughts at the Feedback section below.


 
 

 

 

 

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