Amazon holiday sales more than double
The online retailer generated revenues of more than $650 million during the fourth quarter, but the higher sales are not expected to cut the company's losses for the quarter.
The online retailer giant's holiday sales for the fourth quarter 1999 were more than two-and-half times greater than the sales of $253 million generated in the year-ago quarter. Amazon said it shipped about 20 million items and acquired more than 2.5 million first-time customers.
However, Amazon said that it will incur higher-than-expected inventory-related charges and write-downs, in large part because it carried deep inventory in its newly started toys and electronic stores. This morning, shares of Amazon tumbled 13.65 percent shortly after the opening bell, dropping 11.19 points to 70.75. The stock was the most actively traded issue on the Nasdaq market in early trading with 2.9 million shares changing hands.
"Consistent with our strategy, we went all-out to make sure we delivered for customers this holiday season," Warren Jenson, Amazon's chief financial officer, said in a statement. "As a result, our higher seasonal sales will not translate into lower net losses in the fourth quarter."
While the holiday shopping season appears to have been strong for many e-commerce players, analysts maintain that bringing the customer back to shop throughout the year is of critical importance. While low prices may have initially attracted consumers, it is the quality of customer service, on-time shipping and no-hassle return policies that are likely to drive shoppers back to a particular online retail site.
Amazon expects to release complete 1999 fourth quarter and fiscal year financial results on February 2, 2000.
Based on fourth quarter sales, Amazon has reached a $2.6 billion annualized sales level, the company said.
Just yesterday, Media Metrix ranked Amazon as the most accessed e-commerce site for the holiday shopping season from Nov. 22 to Dec. 26, with an average of about 5.5 million unique visitors per week.
"We invested heavily in distribution capability, and we are very pleased that we shipped well over 99 percent of orders in time for the holidays," Joe Galli, Amazon's president and chief operating officer, said in a statement. "In 2000, we'll continue to raise our standard for customer service while driving productivity, capital efficiency and operational excellence across our entire distribution network."