Amazon is back in a groove, buoyed by the holiday season and an apparently surging Amazon Prime membership that the company said has grown to 150 million members.
The tech giant reported on Thursday that it boosted its revenues in the fourth quarter to $87.4 billion, a 21 percent increase from the last quarter and above its projections in October. The results pleased investors, who drove its shares up 10.9 percent to $2,074.16 in aftermarket trading. In the third quarter, the company had projected to hit net sales between $80 billion and $86.5 billion.
Its net income for the fourth quarter rose to $3.3 billion, while its earnings per share were $6.47.
The tech giant continues to prize its Amazon Prime membership program, having taken steps to sweeten the deal for Prime customers by introducing faster deliveries and more products. Amazon had first invested some $800 million in free one-day delivery, a feature it seems to have gone all in on since last year, and spent more on since, as it tries to bulk up Prime membership. The company plans to expand one-day shipping in 2020.
The web giant also made Amazon Fresh deliveries free for Prime Members, a service it had offered for $14.99 a month, and reported that Amazon Fresh and Whole Foods Market deliveries had doubled in the fourth quarter.
The efforts seem to be paying off — chief executive officer Jeff Bezos said in a statement that the program added the most new members this quarter.
“We’ve made Prime delivery faster — the number of items delivered to U.S. customers with Prime’s free one-day and same-day delivery more than quadrupled this quarter compared to last year,” he said.
Ever-faster Prime deliveries, however, have sparked concerns among labor advocates amid complaints from Amazon warehouse workers who have described working 10-hour workdays or longer, meeting demanding, strictly enforced hourly quotas. During the Prime day event in July, some 100 workers in an Amazon warehouse in Shakopee, Minn., organized a six-hour walk out to draw attention to working conditions there during peak shopping events. Such complaints have also led to workers filing with the U.S. Equal Employment Opportunity Commission as well as lawsuits.
But the company isn’t slowing down. It projected first-quarter sales of between $69 billion to $73.0 billion, a growth of roughly 16 to 22 percent from last year.
Amazon also appears to be making a play for the luxury market, as WWD reported this month, with apparent plans for a digital shopping platform with high-end brands. The prospect may have its detractors. This week, LVMH Moët Hennessy Louis Vuitton chairman and ceo Bernard Arnault said the luxury brand wouldn’t sell its products on Amazon and alluded to the role of such marketplaces in counterfeit sales.
Amazon has increasingly come under scrutiny as retailers and law enforcement target what they say is a proliferation of counterfeits sold online, especially on third-party marketplaces. Such third-party sellers are a major force on Amazon’s platform.
“Independent third-party sellers — mostly small and medium-sized businesses — sold more than a billion items during the holiday season, including more than 100 million items shipped with Prime Free One-Day Delivery,” the company said Thursday.