Amazon reports surge in sales

Amazon's second-quarter results beat market forecasts, thanks partly to the Harry Potter phenomenon
Written by Tony Hallett, Contributor

Amazon.com has reported a strong surge in second-quarter revenue, buoyed by the success of cost-cutting and strong sales internationally of the latest Harry Potter book.

The e-tailer pulled in $1.1bn (£690m) during the three months ending 30 June 2003, compared to $806m a year earlier, and its net loss fell to $43m from $94m.

The results exceed market forecasts and those of Amazon itself, according to UK MD Robin Terrell. Since the start of the year, less money has been spent on advertising and used instead to cut costs, notably raising the threshold at which free delivery kicks in.

Terrell said: "[Free delivery] is expensive for us but it's absolutely the right investment in the long run for customers."

Sales in June were also fuelled by the release of the latest Harry Potter novel, with 400,000 orders in the UK alone being delivered on the day of the book's release. The Royal Mail had to lay on extra vans to satisfy the demands of one of its best customers.

Terrell described it as "an enormous logistical effort but worth it" -- the delivery and half-price offer brought in 250,000 new customers, for example.

The overall revenue figures were affected by the weakening of the dollar against the pound and euro. International sales -- at $397m -- increased 81 per cent year on year in dollar terms, a figure that would have been 51 per cent up had exchange rates remained steady.

The company has now adjusted its forecasts so that for 2003 it now expects sales to grow at least 25 per cent year-on-year to between $4.9bn and $5.1bn, instead of its previous forecast of $4.7bn.

Amazon shares jumped five per cent after the results were released on Tuesday.

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