The juggernaut that is Amazon continued rolling on in the first quarter of 2017, with sales reaching $35.7 billion versus $29.1 billion a year ago, an increase of 23%. Operating margins fell as the company continued to investment large sums into the business, with this year’s 2.8% operating margin trailing last year’s 3.7% and causes overall operating profit to decline slightly.
Gross margins were strong at 37%, but the amount of money Amazon spent on technology and content increased by 37%; on marketing by 34%; and on fulfillment by 27%. A lower tax bill because of changes to stock based compensation expense allowed the company to report higher earnings per share of $1.48, which was much higher than the $1.13 that analysts had anticipated. Revenue was also higher than analysts estimates by $400 million.
While traditional retailers have been struggling with weak mall traffic and shifts in consumer preferences, Amazon has continued gaining market share and positioning itself as one of the dominant retailers in the world.
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