Amazon released its third-quarter financial report for the 2021 fiscal year. According to the report, Amazon’s third-quarter net sales were US$110.12 billion, an increase of 15% compared to US$96.145 billion in the same period last year. Excluding the impact of exchange rate changes, it also increased by 15% year-on-year; net profit was US$3.156 billion, a 50% decrease compared with the net profit of 6.331 billion U.S. dollars in the same period last year.
Amazon’s third-quarter revenue and diluted earnings per share did not meet Wall Street analysts’ previous expectations, and the outlook for fourth-quarter revenue was less than expected, resulting in a sharp drop of nearly 4% in its after-market share price.
After the earnings report was released, Amazon CFO Brian Olsavsky (Brian Olsavsky) and head of investor relations Dave Fildes (Dave Fildes) answered questions from investors.
Merrill Lynch Bank of America analyst Justin Post: My question is about distribution capabilities. You mentioned earlier that compared to before the outbreak, Amazon’s current delivery capacity is twice as high as before, and its unit delivery capacity has increased by about 55% in the past two years. My question is: As the delivery time of goods becomes shorter and shorter, more and more goods achieve “one-day delivery”, will the unit delivery capacity be further improved? In addition, is Amazon fully prepared for next year? Will investment spending be reduced next year?
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Brian Osavsky: Regarding your first question, our delivery capabilities also include transportation delivery capabilities. In the past two years, Amazon’s self-operated logistics (AMZL) has greatly increased its distribution capacity. From a global perspective, 50% of our goods are transported by AMZL. This is one of the important reasons for the increase of our unit’s distribution capacity.
Moreover, in the past two years, we have been doing our best to meet order requirements. With the holidays approaching, we are currently trying our best to increase inventory. In the third quarter, unit inventory increased by nearly 8% year-on-year, and both in North America and the world, inventory growth reached nearly 40%. We are gradually restoring inventory in the distribution center, after all, the holidays are getting closer and closer. Therefore, I think our distribution capacity and warehouse capacity will continue to increase rapidly.
Regarding the plan for next year, we do not make predictions for the time being, and we hope that there will be further growth. In previous meetings, I also mentioned that by the middle of the second quarter of next year, the growth rate may slow down. We had a similar dilemma in 2020 when the growth rate was around 40%. But in the long term, we hope to maintain the momentum of growth, and we can see from the data that the momentum of development this year is still strong.
In the short term, our production capacity is actually limited by labor, so there will be capital expenditure next year in this regard. We hope that this situation can be improved in early 2022.
