Dive Brief:
- Amazon’s fourth quarter online store net sales increased 10% year over year to nearly $83 billion, per a Thursday press release. The e-commerce giant’s physical store sales rose 5% to about $5.9 billion.
- Related retail operations also grew, with third-party seller services increasing 11% and subscription services jumping 14%. Amazon’s overall net income increased from $20 billion in the same period the year before to $21.2 billion in its latest quarter.
- Amazon expects companywide net sales for the first quarter of fiscal year 2026 to be between $173.5 billion and $178.5 billion, representing growth between 11% and 15% year over year.
Dive Insight:
For Amazon’s retail side of the business, the company is continuing to beat the drum on expanding its assortment with both higher-end products and everyday essentials.
“We're going to work really hard to expand selection,” CEO Andy Jassy told analysts on a Thursday call. “We have a lot more of those luxury brands that have built presences in Amazon had success and found that we could manage their brand presentation in the right way, and they've been very happy.”
Jassy’s comments come as the e-commerce company recently said it will continue operating a luxury online storefront despite Saks Global wanting to end its partnership with Amazon. Amazon developed its “Luxury Stores at Amazon” storefront about a year ago, which was curated by Saks Fifth Avenue. Saks Global is now seeking to end the arrangement as part of its bankruptcy process.
For its nonluxury assortment, Jassy noted that everyday essentials represented one out of every three units sold in fiscal 2025.
“[North American retail] and International benefited from an expanded product assortment, sharper pricing, and faster delivery,” Telsey Advisory Group analysts led by Joe Feldman said in an emailed note Friday. “Amazon's ability to fuel key growth opportunities — grocery, private brands, pharmacy, logistics, and generative AI — should make it more valuable.”
In addition to the assortment efforts, Jassy on the Thursday call highlighted the company’s quick delivery initiatives. The chief executive said it launched Amazon Now in India, Mexico and the United Arab Emirates, which provides delivery on thousands of items in 30 minutes or less. Amazon is also testing it in several communities across the U.S. and U.K.
Although the e-commerce giant maintained market share despite increasing competition, GlobalData Managing Director Neil Saunders said that there was a notable divergence between Amazon's online and physical store sales.
“The more lackluster store numbers were delivered even though Whole Foods continues to perform reasonably well, so they underscore some of the reasoning for Amazon exiting its own-brand physical grocery stores,” Saunders said in emailed comments Thursday.
Amazon in January announced that it would close all of its convenience-oriented Amazon Go stores, as well as its grocery-focused Amazon Fresh locations. An undisclosed number of those locations will be converted into Whole Foods Market stores.
Meanwhile, the e-commerce company is working to open a new store concept outside of Chicago, which will be its first big-box format featuring household essentials and groceries.
Amazon’s latest earnings results also come about a week after it revealed it will cut another 16,000 roles in a broader downsizing effort, adding to the previous 14,000 positions it cut in 2025. The company did not disclose how much of the latest reduction will impact retail operations positions.
