Sponsored By

Amazon’s sales, earnings boom in third quarter

Physical store sales down 10%, impacted by COVID-19 crisis

Russell Redman

October 30, 2020

3 Min Read
Amazon_Fresh_shopper-Woodland_Hills_CA.png
Amazon’s physical store sales fell 10% to $3.79 billion in the third quarter from a year ago but edged up 0.3% on quarter-to-quarter basis.Amazon

Amazon zoomed past Wall Street’s high-end earnings forecast for the fiscal 2020 third quarter, with overall sales surging 37% despite a double-digit decrease in physical store sales due to the pandemic.

For the quarter ended Sept. 30, Amazon totaled net sales of $96.15 billion, compared with $69.98 billion a year earlier. Online sales came in at nearly $45.9 billion, up 38% (37% excluding foreign exchange) from $35.04 billion in the prior-year period.

Amazon’s physical store sales, which include Whole Foods Market, fell 10% to $3.79 billion from $4.19 billion in the 2019 quarter. That followed a 13% year-over-year decline in the second quarter, though sequentially physical store sales edged up 0.3% from the second to third quarters.

In a conference call with analysts, Amazon Chief Financial Officer Brian Olsavsky cited grocery as a bright spot in online sales, led by members of the company’s Prime customer benefits program.

“Prime members continue to shop with greater frequency and across more categories than before the pandemic began,” Olsavsky said in the call late yesterday.

“We’re also reaching more customers with our grocery offerings,” he told analysts. “In Q3, our year-over-year growth rate of online grocery sales continued to accelerate, and we’ve continued to offer more convenient options for customers, including grocery pickup, which is now available from all Whole Foods Market stores.”

Related:Second Amazon Fresh supermarket opens its doors

As at other retailers, Amazon has seen reduced brick-and-mortar traffic because of COVID-19-related restrictions, including store closures, and customer concerns about the virus. On the food retail side, the Seattle-based e-tail giant had closed the majority of its Amazon Go cashierless convenience stores, but most of the shut locations have since reopened.

Olsavsky noted that Prime members are showing a higher level of engagement and using more of the program’s digital benefits.

“We like the trends on connectiveness to our Prime program, and we think that will have lasting value. When things open up a bit more and there are more store options for people to buy from, there will be a leveling of volume back to the stores, I would imagine,” he said in the analyst call. “So we think the trends are good. The adoption curves have been pulled forward from our pre-COVID thinking, especially on things like grocery delivery.”

InMarket_Q3_store_traffic-Whole_Foods_vs_Trader_Joes.png

Digital marketing firm inMarket reported that third-quarter foot traffic at Whole Foods was down 40.02% from a year ago. Visits by new shoppers fell 53.23% in the period, while micro-visits (trips shorter than five minutes), fell 36.45%. However, rival Trader Joe’s saw larger falloffs in those traffic metrics during the quarter, according to inMarket, whose analysis includes visitation habits, frequency and “dwell time” in-store on the shopper’s path to purchase.

Related:Whole Foods Market launches free grocery pickup at all stores

Currently, Amazon’s U.S. physical stores include 487 Whole Foods Markets, two Amazon Fresh grocery stores, two Amazon Go Grocery stores, 26 Amazon Go convenience stores (four temporarily closed), 23 Amazon Books stores, 27 Amazon 4-Star outlets and seven Presented by Amazon pop-up locations (one temporarily closed).

At the bottom line, Amazon posted third-quarter net income of $6.33 billion, or $12.37 per diluted share, compared with $2.13 billion, or $4.23 per diluted share, a year ago.

Analysts, on average, had projected earnings per share of $7.41, with estimates ranging from a low of $4.62 to a high of $11.86, according to Refinitiv/Thomson Reuters.

Amazon forecasts fourth-quarter net sales at $112 billion to $121 billion, a year-over-year gain of 28% to 38%.

“We’re seeing more customers than ever shopping early for their holiday gifts, which is just one of the signs that this is going to be an unprecedented holiday season,” Amazon founder and CEO Jeff Bezos said in a statement. “Big thank you to our employees and selling partners around the world who’ve been busy getting ready to deliver for customers this holiday.”

For our most up-to-date coverage, visit the coronavirus homepage.

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

Stay up-to-date on the latest food retail news and trends
Subscribe to free eNewsletters from Supermarket News

You May Also Like