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Summary: Amazon 1Q22 Results
Amazon’s retail business continued its deceleration as the company lapped the end of the pandemic and stimulus payments from a year ago. Its fulfillment capacity is now back to pre-pandemic performance levels, helping support 60%+ GMV growth on a two-year stack basis.
- North America (+8% Y/Y) performed better than International (down 6% Y/Y).
- 3P (+7%) continued its outperformance of 1P (down 3%)
- Amazon has not seen any softness in consumer demand stemming from inflation, although is “weary of it” as we progress through the year.
- Amazon expects to see less of a fulfillment challenge in Prime Day and Holiday this year as a result of excess capacity in its system, setting itself up for better in-stock levels, more deal capacity, and higher advertising spend.
- Retail margins continued their slide, with profit contribution from advertising helping to offset these losses only partially.
- The company guided next quarter to 3-7% Y/Y growth, a 200 basis point deceleration from the March quarter. This includes a negative 400 basis point impact as Prime Day will be shifted into July (3Q, vs. 2Q last year).
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