January 28, 2010, 12:00 AM

Amazon.com grows annual sales by 28% in 2009

While other web retailers may have seen their sales and profits lag in 2009, Amazon.com flourished. Total sales for the year and in Q4 increased 28% and 41.9%, respectively.

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While other web retailers may have seen their sales and profits lag in 2009, Amazon.com Inc.-the world’s biggest online retailer-kept right on growing both its top and bottom line.

 

For the fourth quarter ended Dec. 31 Amazon, No. 1 in the Internet Retailer Top 500 Guide, (a PDF version of the company’s financial and operating profile can be ordered by clicking on its name) reported:

     

  • Net sales were $9.51 billion, a 41.9% increase from $6.70 billion in Q4 2008.

     

  • North American net sales totaled $4.95 billion, up 36.4% from $3.63 billion in Q4 2008. North America accounted for about 52.1% of sales in 2009 compared with 54.2% in 2008.

     

  • International net sales totaled $4.56 billion, up 48.5% from $3.07 billion in Q4 2008. International accounted for about 48.0% of sales in 2009 compared with 45.8% in 2008.

     

  • Worldwide sales of books, music and videos increased 28.3% to $4.67 billion from $3.64 billion while electronics and other merchandise increased 59.7% to $4.60 billion from $2.88 billion in the fourth quarter of 2008.

     

  • Operating income grew year over year 75.0% to $476.0 million from $272.0 million.

     

  • Net income grew year over year 70.7% to $384.0 million from $225.0 million in Q4 2008.

     

  • Spending on marketing increased 64.1% to $274.0 million from $169.0 million in Q4 2008. Marketing expenses accounted for 2.90% of net sales.

     

  • Spending on technology and content increased 25.9% to $350.0 million from $278.0 million in Q4 2008. Technology expenses accounted for 3.7% of net sales.

     

  • Spending on fulfillment increased 37.5% to $755.0 million from $549.0 million in Q4 2008. Fulfillment expenses accounted for 1% of net sales.

     

  • General and administrative spending rose year over year to $100.0 million from $72.0 million in the fourth quarter of 2008, an increase of 38.9%. General and administrative spending accounted for 1.1% of net sales.

     

For the full year Amazon reported:

     

  • Net sales were $24.51 billion, a 28% increase from $19.17 billion last year.

     

  • North American net sales totaled $12.80 billion, up 25% from $10.20 billion in 2008. North America accounted for 52% of sales in 2009 compared with 53% in 2008.

     

  • International net sales totaled $11.68 billion, up 31% from $8.93 billion in 2008. International accounted for 48% of sales in 2009 compared with 47% in 2008.

     

  • Worldwide sales of books, music and videos increased 15% to $12.77 billion from $11.08 billion while electronics and other merchandise increased 47% to $11.08 billion from $7.54 billion.

     

  • Operating income grew year over year 34% to $1.13 billion.

     

  • Net income grew year over year 39.8% to $902.0 million from $645.0 million

     

  • Spending on marketing increased 41.1% to $680.0 million from $482.0 million in 2008. Marketing expenses accounted for 2.8% of net sales.

     

  • Spending on technology and content increased 20.4% to $1.24 billion from $1.03 billion in 2008. Technology expenses accounted for 5.1% of net sales.

     

  • Spending on fulfillment increased 24.2% to $2.05 billion from $1.65 billion in 2008. Fulfillment expenses accounted for 8.4% of net sales.

     

  • General and administrative spending rose year over year 17.6% to $328.0 from $279.0 million in 2008. General and administrative spending accounted for 1.3% of net sales.

     

Amazon devoted considerable time and effort to developing its e-book reader, Kindle, in 2009. While Amazon didn’t break out any specific numbers in its earnings release, CEO Jeff Bezos says its Kindle franchise will be a big part of its business plans in 2010. “Millions of people now own Kindles,” Bezos says. “And Kindle owners read, a lot. When we have both editions, we sell six Kindle books for every 10 physical books. This is year-to-date and includes only paid books-free Kindle books would make the number even higher. It’s been an exciting 27 months.”

 

Amazon expects net sales in the first quarter to range from $6.45 billion to $7.00 billion and operating income to range from $275.0 million to $365.0 million.

 

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