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A Look At Amazon's Physical Retail & Subscription Growth
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Shares of Amazon (AMZN - Free Report) surged over 4% on Friday to touch a brand new all-time high one day after the e-commerce powerhouse posted strong first quarter results. But while much attention has been paid to Amazon’s massive bottom line beat and continued online sales expansion, let’s dive into the company’s physical retail growth along with its booming subscriber business.
Amazon posted adjusted Q1 earnings of $3.27 per share, which crushed our Zacks Consensus Estimate of $1.22 per share. Meanwhile, the company’s overall first quarter revenues surged 43% to $51.04 billion. This also beat our $50.17 billion consensus estimate.
Investors should note that Amazon Web Services, or AWS, soared 49% from the year-ago period to $5.44 billion—topping our estimate. Amazon also posted online sales of $26.94 billion and third-party seller revenues of $9.27 billion.
With that said, two other important Amazon growth areas deserve some more attention.
Physical Stores
The company reported first quarter physical stores sales of $4.26 billion. This is only the third period that Amazon reported such revenues, but its sales soared from $1.28 billion in the third quarter of 2017.
Amazon bought Whole Foods almost a year ago for $13.4 billion, marking the biggest move in the company’s effort to expand its physical retail presence. And Whole Foods revenues, from its 479 stores, account for a large portion of these physical stores sales. But Amazon has also expanded its retail footprint in other ways.
Amazon opened its first bookstore in November 2015. The company now has 15 total Amazon Books locations throughout the U.S., from California to New York. Amazon plans to open three more new locations soon.
The e-commerce giant also has an array of pop-up stores throughout the country. Amazon sets up these temporary shops in malls, Whole Foods, and Kohl’s (KSS - Free Report) stores in order to sell different Amazon products, including Kindle and Echo devices.
Amazon’s physical retail revenue also included the company’s unique, no checkout Amazon Go store in Seattle. Cleary, Amazon is slowly expanding its brick-and-mortar presence, with the nascent unit accounting for roughly 8.3% of total first quarter revenue.
Subscription Services
Moving on, Amazon’s subscription services unit is made up primarily of annual and monthly fees associated with Amazon Prime memberships, audiobook and digital music fees, as well as all other non-AWS subscriptions services. Just last week, CEO Jeff Bezos publicly revealed for the first time that its Prime program currently boasts 100 million paying members worldwide.
Amazon’s quarterly subscription revenues surged 60% from $1.94 billion in the year-ago period to hit $3.10 billion. The big climb was larger than both AWS and online sales, and can be attributed to Amazon Prime’s expansion.
Subscription Services are also set to get a boost after Amazon announced a planned rate hike on its first quarter earnings call that will see its yearly Prime membership fees jump from $99 to $119, starting on May 11.
Amazon’s latest rate hike comes only a few months after it raised Prime's monthly membership from $10.99 per month to $12.99 per month.
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Image: Bigstock
A Look At Amazon's Physical Retail & Subscription Growth
Shares of Amazon (AMZN - Free Report) surged over 4% on Friday to touch a brand new all-time high one day after the e-commerce powerhouse posted strong first quarter results. But while much attention has been paid to Amazon’s massive bottom line beat and continued online sales expansion, let’s dive into the company’s physical retail growth along with its booming subscriber business.
Amazon posted adjusted Q1 earnings of $3.27 per share, which crushed our Zacks Consensus Estimate of $1.22 per share. Meanwhile, the company’s overall first quarter revenues surged 43% to $51.04 billion. This also beat our $50.17 billion consensus estimate.
Investors should note that Amazon Web Services, or AWS, soared 49% from the year-ago period to $5.44 billion—topping our estimate. Amazon also posted online sales of $26.94 billion and third-party seller revenues of $9.27 billion.
With that said, two other important Amazon growth areas deserve some more attention.
Physical Stores
The company reported first quarter physical stores sales of $4.26 billion. This is only the third period that Amazon reported such revenues, but its sales soared from $1.28 billion in the third quarter of 2017.
Amazon bought Whole Foods almost a year ago for $13.4 billion, marking the biggest move in the company’s effort to expand its physical retail presence. And Whole Foods revenues, from its 479 stores, account for a large portion of these physical stores sales. But Amazon has also expanded its retail footprint in other ways.
Amazon opened its first bookstore in November 2015. The company now has 15 total Amazon Books locations throughout the U.S., from California to New York. Amazon plans to open three more new locations soon.
The e-commerce giant also has an array of pop-up stores throughout the country. Amazon sets up these temporary shops in malls, Whole Foods, and Kohl’s (KSS - Free Report) stores in order to sell different Amazon products, including Kindle and Echo devices.
Amazon’s physical retail revenue also included the company’s unique, no checkout Amazon Go store in Seattle. Cleary, Amazon is slowly expanding its brick-and-mortar presence, with the nascent unit accounting for roughly 8.3% of total first quarter revenue.
Subscription Services
Moving on, Amazon’s subscription services unit is made up primarily of annual and monthly fees associated with Amazon Prime memberships, audiobook and digital music fees, as well as all other non-AWS subscriptions services. Just last week, CEO Jeff Bezos publicly revealed for the first time that its Prime program currently boasts 100 million paying members worldwide.
Amazon’s quarterly subscription revenues surged 60% from $1.94 billion in the year-ago period to hit $3.10 billion. The big climb was larger than both AWS and online sales, and can be attributed to Amazon Prime’s expansion.
Subscription Services are also set to get a boost after Amazon announced a planned rate hike on its first quarter earnings call that will see its yearly Prime membership fees jump from $99 to $119, starting on May 11.
Amazon’s latest rate hike comes only a few months after it raised Prime's monthly membership from $10.99 per month to $12.99 per month.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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