Record-Breaking Holiday Shopping Helps Boost Amazon's Q4

Amazon has achieved meaningful revenue and operating income as reported in its fourth quarter ended Dec. 31, 2023. Analysts had predicted the global company would see a favorable Q4 compared to last year, when the company was contending with higher costs tied to inflation, the war in Ukraine and supply chain constraints. 

Net sales increased 14% to $170.0 billion in Q4 2023, compared with $149.2 billion in Q4 2022. Excluding the $1.3 billion favorable impact from year-over-year (YoY) changes in foreign exchange rates throughout the quarter, net sales increased 13% compared with Q4 2022. North America segment sales rose 13% YoY to $105.5 billion.

Operating income grew to $13.2 billion, compared with last year’s $2.7 billion. In North America, operating income was $6.5 billion, compared with an operating loss of $0.2 billion in Q4 2022.

The company’s net income grew to $10.6 billion in Q4 2023, or $1.00 per diluted share, compared with $0.3 billion, or $0.03 per diluted share last year.

Amazon also reported robust earnings for the full year 2023. During this time, its net sales climbed 12% to $574.8 billion in 2023, compared with $514.0 billion in 2022. North America segment sales increased 12% year-over-year to $352.8 billion.

Operating income surged to $36.9 billion in 2023, compared with $12.2 billion in 2022. The operating income in North America reached $14.9 billion, compared with an operating loss of $2.8 billion in 2022.

Amazon’s net income was $30.4 billion in 2023, or $2.90 per diluted share, compared with a net loss of $2.7 billion, or $0.27 per diluted share, in 2022.

Operating cash flow increased 82% to $84.9 billion for the trailing 12 months, compared with $46.8 billion for the trailing 12 months ended Dec. 31, 2022. Free cash flow improved to an inflow of $36.8 billion for the trailing 12 months, compared with an outflow of $11.6 billion for the 12 months prior.

“This Q4 was a record-breaking holiday shopping season and closed out a robust 2023 for Amazon,” commented Andy Jassy, Amazon CEO. 

During the record-breaking Black Friday and Cyber Monday holiday shopping event, customers worldwide purchased more than 1 billion items on Amazon and saved nearly 70% more during the 11 days of deals compared to the same period in 2022. In the United States, customers ordered more than 500 million items from independent sellers, and millions of customers signed up for a Prime membership. Through the entire holiday season, customers purchased more items on Amazon than during any previous holiday season.

“While we made meaningful revenue, operating income, and free cash flow progress, what we’re most pleased with is the continued invention and customer experience improvements across our businesses,” said Jassy. 

For example, in 2023, Amazon delivered to Prime members at the fastest speeds ever globally, with more than 7 billion units arriving the same or next day, including more than 4 billion in the United States. Amazon now offers Same-Day Delivery in more than 110 U.S. metro areas and operates more than 55 dedicated Same-Day sites across the nation. Amazon announced Prime Air drone deliveries will expand to an additional location in the United States in late 2024. 

In the grocery segment, the company expanded Amazon Fresh grocery delivery and free pickup to customers without a Prime membership in the United States. It redesigned multiple Amazon Fresh stores in the UK and United States and opened several new Whole Foods Market stores in America. Amazon also expanded third-party grocery delivery with additional Weis Markets supermarkets.

Looking ahead, Amazon expects Q1 2024 guidance to include net sales between $138.0 billion and $143.5 billion, or to grow between 8% and 13% compared with Q1 2023. Operating income is expected to be between $8.0 billion and $12.0 billion, compared with $4.8 billion in first quarter 2023. 

“As we enter 2024, our teams are delivering at a rapid clip, and we have a lot in front of us to be excited about,” said Jassy.

Seattle-based Amazon is No. 2 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America. PG also named the company one of its Retailers of the Century.