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Amazon reports first $100 billion quarter following holiday and pandemic shopping surge

Amazon said in its earnings report for the fourth quarter of 2020 that AWS CEO Andy Jassy will replace Jeff Bezos as CEO in the third quarter of this year.

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Amazon announced in its earnings report for the fourth quarter of 2020 that Amazon Web Services CEO Andy Jassy will replace Jeff Bezos as Amazon CEO during the third quarter of this year. Bezos will become executive chairman.

The company also delivered its largest quarter by revenue of all time at $125.56 billion, pushing it past the symbolic $100 billion mark for the first time.

Shares of Amazon were up 1% in extended trading.

Here are the results:

  • Earnings: $14.09 vs $7.23 per share forecast by Refinitiv
  • Revenue: $125.56 billion vs $119.7 billion forecast by Refinitiv

Bezos announced his decision to step down in the earnings release and in a memo to employees, noting that he will focus on “new products and early initiatives” in his new role, including the Day One Fund, Bezos Earth Fund, The Washington Post and his private space company Blue Origin.

“If you do it right, a few years after a surprising invention, the new thing has become normal. People yawn. That yawn is the greatest compliment an inventor can receive,” Bezos wrote. “When you look at our financial results, what you’re actually seeing are the long-run cumulative results of invention. Right now I see Amazon at its most inventive ever, making it an optimal time for this transition.”

During a call with investors, Amazon CFO Brian Olsavsky said the company has a “highly effective” succession plan in place that will enable a smooth transition for Jassy to take the helm as CEO.

Jassy now has a chance to “put an imprint on Amazon,” Olsavsky said, though he noted Bezos won’t be far away from the company in his new role as executive chairman.

“I will reiterate that Jeff is not leaving. He is getting a new job,” Olsavsky said. “He will be involved in many large one-way-door issues, as we say, one-way doors meaning the more important decisions things like acquisitions, things like strategies, and going into grocery and other things.

“So, Jeff’s always been involved with that, and that’s where we’ll keep his time focused on,” he added.

After several months of heavy investments, Amazon said it expects coronavirus-related costs to decelerate to about $2 billion in the first quarter of fiscal 2021, down from roughly $4 billion in the third quarter of this year and more than $2 billion in the second quarter.

Olsavsky attributed the step down in Covid costs to a shift in volume. “We’re expecting volumes to drop about 25% from Q4 to Q1,” he added.

The company also experienced higher costs in the fourth quarter after it paid a one-time $300 bonus to front-line employees in November of last year.

The company forecast operating income of $3 billion to $6.5 billion in the fiscal first quarter, assuming the roughly $2 billion of costs related to Covid-19.

Amazon said sales in the first quarter will be between $100 billion and $106 billion, a slowdown from the fourth quarter of 2020, but an increase of between 33% and 40% from a year earlier. Analysts were expecting revenue of $95.8 billion.

Amazon’s blockbuster fourth-quarter results were driven in part by what the company called a “record-breaking holiday season,” during which it delivered more than a billion products to shoppers worldwide. Continued accelerated e-commerce demand and a pandemic-delayed Prime Day also contributed to Amazon’s record revenue in the quarter.

The company has gone on a hiring spree in order to keep up with the demand spike. Amazon said it hired 175,000 new full- and part-time employees in the fourth quarter alone, which is more than triple the 50,000 employees it hired in the year-ago period. Amazon now counts nearly 1.3 million employees across the globe, an increase of 63% year over year.

Once again, the costs of shipping goods to consumers ticked higher, with expenses up 67% from a year earlier to $21.5 billion.

Outside of its core retail business, Amazon’s cloud-computing unit saw its revenue climb 28% to $12.7 billion from $9.95 billion a year earlier. That fell short of Wall Street’s expectations of $12.83 billion.

Amazon doesn’t break out the performance of its advertising business, but that makes up the majority of its “other” category, which brought in $7.9 billion in revenue for the quarter. That’s an increase of 64% from a year ago, which Olsavsky said was primarily driven by a resurgence in ad spending and Prime Day.

Sales fell 8% in Amazon’s physical store unit, which includes Whole Foods Market, as the pandemic has pushed shoppers to experiment with new shopping methods, including online grocery ordering.

Here are the results:

Source: https://www.cnbc.com/2021/02/02/amazon-amzn-earnings-q4-2020.html

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RH beats earnings, hikes outlook as retail rebound boosts high-end home goods; shares jump

Shares of the high-end furniture retailer surged Wednesday after the company beat analysts’ profit and sales estimates for the fiscal first quarter.

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Jason Kempin | Getty Images Entertainment | Getty Images

Shares of the high-end furniture retailer RH surged in extended trading Wednesday after the company beat analysts’ profit and sales estimates for the fiscal first quarter.

RH also hiked its full-year outlook, building on the momentum it’s seeing in the luxury home category, and gave a stronger-than-expected sales forecast for the second quarter.

In a letter to shareholders, Chief Executive Officer Gary Friedman said the remainder of this year “will surely be a tale of two halves” for the retail industry. But he said that “the un-masking of the general public could lead to a Roaring Twenties type of consumer exuberance.”

The company’s stock was last up more than 7%.

Here’s how RH did in the quarter ended May 1 compared with what analysts were anticipating, using Refinitiv estimates:

  • Earnings per share: $4.89 adjusted vs. $4.10 expected
  • Revenue: $861 million vs. $758 million expected

RH’s net income for the fiscal first quarter grew to $130.7 million, or $4.19 per share, compared with a loss of $3.2 million, or 17 cents per share, a year earlier. Excluding one-time adjustments, it earned $4.89 per share, topping expectations for $4.10.

Revenue surged 78% to $861 million from $483 million a year earlier. That also beat expectations for $758 million.

Friedman said that a strong housing and renovation market, a record stock market, low interest rates, and the reopening of the U.S. economy all bode well for the company in the quarters ahead.

RH hiked its fiscal 2021 outlook for revenue growth to a range of 25% to 30%, compared with a prior range of 15% to 20%. Analysts had been looking for a 19.7% increase year over year.

For its fiscal second quarter, RH expects revenue to grow 35% to 37%. Analysts had been looking for a 27.2% jump.

The company is preparing to kick off its global expansion in the spring of 2022, starting with England. To drive future growth, it is also considering expanding into new services, potentially into areas such as landscape architecture. It currently offers interior design consulting.

RH shares are up roughly 37% year to date. The company has a market cap of about $13 billion.

Find the full earnings press release from RH here.

Source: https://www.cnbc.com/2021/06/09/rh-earnings-q1-2021.html

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GameStop sales rise 25% as retailer chases e-commerce growth, says it may sell 5 million shares

GameStop sales rose 25% in the fiscal first quarter as the company focuses on e-commerce and tries to stage a turnaround.

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SELINSGROVE, PENNSYLVANIA, UNITED STATES – 2021/01/27: A woman walks past the GameStop store inside the Susquehanna Valley Mall. An online group sent share prices of GameStop (GME) and AMC Entertainment Holdings Inc. (AMC) soaring in an attempt to squeeze short sellers.

Photo by Paul Weaver/SOPA Images/LightRocket via Getty Images

GameStop‘s sales rose 25% in the fiscal first quarter, as the video game retailer embarks on a turnaround strategy partially fueled by a Reddit-inspired stock rally. The company also named former Amazon executive Matt Furlong as its new CEO.

Shares fell more than 12% in extended trading on Wednesday, after the company declined to provide an outlook for the year and said it may sell as many as 5 million shares.

Here’s how the company did for the fiscal first quarter ended May 1, compared with Refinitiv consensus estimates:

  • Loss per share: 45 cents per share adjusted vs. 84 cents expected
  • Revenue: $1.28 billion vs. $1.16 billion expected

In the quarter, GameStop reported that its net loss narrowed to $66.8 million, or $1.01 per share, from a loss of $165.7 million, or $2.57 per share, a year earlier. Excluding items, the company had a loss of 45 cents per share. Analysts were expecting GameStop to report a loss of 84 cents per share, according to Refinitiv.

Total revenue grew to $1.28 billion from $1.02 billion a year earlier, topping Wall Street’s expectations of $1.16 billion.

The company declined to provide a forecast for the year. It said sales momentum continued into the second quarter, with total sales in May increasing about 27% compared with the same month a year ago.

GameStop filed a prospectus with the Securities and Exchange Commission to sell up to 5 million shares of its stock from time to time, in “at-the-market” offerings. The funds it raises through these stock sales will be used for general corporate purposes, investing in growth initiatives and strengthening its balance sheet, the company said.

As of May 1, GameStop said, it had paid off its long-term debt and no longer had any borrowings under its asset-based revolving credit facility.

The video game retailer’s stock has gyrated wildly over the past several months as retail traders have shared tips on Reddit and tried to fuel short squeezes for companies including GameStop, AMC Entertainment, Bed Bath & Beyond and Clover Health — collectively the group has become known as meme stocks.

GameStop’s shares are up 1,506% so far this year. Its shares have swung from a 52-week low of $3.77 to a 52-week high of $483. As of Wednesday’s close, shares were $302.56. Its market value is $21.41 billion.

The trading frenzy has gotten the attention of the SEC. In a filing Wednesday, GameStop said it had received a request from the SEC on May 26 to voluntarily provide documents and information. The company said it was reviewing that request and planned to cooperate.

GameStop has tried to catch investors’ attention in other ways, as it focuses more on e-commerce and poaches talent from other companies. This spring, it tapped Chewy co-founder Ryan Cohen to lead efforts to grow the online business. He was named chairman at a shareholder meeting Wednesday. The company also hired several former Amazon executives, including Jenna Owens, its new chief operating officer; Matt Francis, its first chief technology officer; and Elliott Wilke, its chief growth officer.

Yet some analysts are unconvinced that the longtime brick-and-mortar retailer can pivot its business and believe the company has been propped up by speculation.

Loop Capital analyst Anthony Chukumba dropped his coverage of GameStop earlier this year following the Reddit frenzy. He told CNBC that the video game retailer’s challenges run deep regardless of who it hires.

“It’s great that these guys worked at Amazon. Amazon is a very successful retailer that I do cover, that I’m very familiar with, but at the end of the day, GameStop’s problems have very little, if anything, to do with e-commerce,” Chukumba said on CNBC’s “Closing Bell.”

“Their problem is not that they’re not a good omnichannel retailer. The problem is that gamers are increasingly downloading video games,” he added. “Look, they can hire Jeff Bezos when he comes back from space. … It’s not going to make a difference. The symptoms are not aligned with the medicine that the doctor is giving them. You can hire anyone you want from Amazon — not going to make a difference.”

Read the company’s earnings press release here and its CEO announcement here.

— CNBC’s Kevin Stankiewicz contributed to this story.

Correction: GameStop named former Amazon executive Matt Furlong as its new CEO. An earlier version of this story misstated his first name.

Source: https://www.cnbc.com/2021/06/09/gamestop-gme-earnings-q1-2021.html

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U.S. Covid cases near pandemic low as travel picks up for Memorial Day weekend

The 11,976 new Covid-19 cases reported on May 29 were the lowest since March 23, 2020.

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A crowd of travelers check in for their flights at LAX on Friday, May 28, 2021.

Allen J. Schaben | Los Angeles Times | Getty Images

The U.S. has reported the lowest number of Covid-19 cases in more than a year, as the nation’s airports over Memorial Day weekend experienced the largest number of travelers since the pandemic began.

The 11,976 new cases reported on May 29 were the lowest since March 23, 2020, when 11,238 new cases were reported, according to data from Johns Hopkins University.

The seven-day average of 21,007 is the lowest since March 31 of last year, when it was 19,363.

Friday also saw the TSA report the highest number of travelers since the pandemic began, with more than 1.9 million people taking to the skies for the long weekend. At the same point last year, the TSA counted just 327,000 passengers at its checkpoints.

The World Health Organization officially declared Covid-19 a global pandemic on March 11, 2020. The U.S. reported 1,147 Covid cases that day. The pandemic would go on to infect more than 33 million people in the U.S. and kill nearly 600,000 people.

Within a week of the WHO declaration, daily TSA travel numbers dropped from 1.7 million to 620,000. By March 25, the number was at 203,000. Since March 11, 2021, the daily number of fliers has remained above 1 million.

More than 60% of U.S. adults have at least one dose of a Covid vaccine, while 40.5% of adults are fully vaccinated, according to Centers for Disease Control and Prevention data. President Biden announced earlier this month that his administration is aiming to increase the number of adults with at least one dose to 70% by July 4. He also said he wants 160 million American adults fully vaccinated by the same date.

“If we succeed in this effort,” Biden said during his announcement, “then Americans will have taken a serious step toward a return to normal.”

The CDC recently said fully vaccinated people do not need to wear masks in most settings, though masks are still required on airplanes, buses, trains and public transportation. Cities across the country are lifting restrictions on indoor dining and gatherings as cases fall and vaccinations increase.

White House chief medical advisor Dr. Anthony Fauci has repeatedly said that he wants to see daily case numbers drop below 10,000 before a broad relaxation of safety measures takes place.

Source: https://www.cnbc.com/2021/05/30/us-covid-cases-lowest-in-a-year-as-memorial-day-travel-picks-up.html

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