Amazon profits halve despite strong holiday sales

Amazon’s full-year profits halved to $12.2bn (£9.9bn) in FY22, as international sales fell 8% year-on-year to $34.5bn (£28.1bn). 

This comes in spite of the group’s net sales increasing 12% during the holiday season of 2022 compared with the same period last year. 

In addition, the retailer’s operating income decreased to $2.7bn (£2.2bn) in the fourth quarter, with its international segment suffering an operating loss of a further $2.2bn (£1.8bn).

Despite the group’s performance during the holiday quarter, its net sales increased 9% to $514bn (£419.9bn) in 2022 from $469.8bn (£383.8bn) in the previous year. 

Earlier this month, the group announced plans to cut 18,000 jobs in a bid to cut costs and will be temporarily halting its Amazon Fresh expansion. 

Andy Jassy, CEO of Amazon, said: “Our relentless focus on providing the broadest selection, exceptional value, and fast delivery drove customer demand in our stores business during Q4 that exceeded our expectations, and we’re appreciative of all our customers who turned to Amazon this past holiday season. 

“We’re also encouraged by the continued progress we’re making in reducing our cost to serve in the operations part of our stores business. In the short term, we face an uncertain economy, but we remain quite optimistic about the long-term opportunities for Amazon.” 

He added: “When you also factor in our investments and innovation in several other broad customer experiences, there’s additional reason to feel optimistic about what the future holds.”