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Amazon.com Quarterly Sales Hit $116 M, with $21M Loss
Jim Milliot -- 7/27/98
The pattern was a familiar one when Amazon.com released its second quarter results last week, namely, soaring sales and higher losses. Sales in the period rose 316% over the second quarter of 1997, reaching $116 million. The online bookseller also reported an operating loss of $17 million in the recent period, compared to $7.1 million in the second quarter of 1997. The net loss increased to $21.2 million from $6.7 million.
For the first six months of 1998, sales totaled $203.3 million, putting Amazon.com on a track to pass the $500-million sales mark for the full year. The company's operating loss in the first six months of 1998 was $25.9 million, up from $10.2 million. Part of the reason for Amazon.com's deepening losses is its decision to continue to pour money into marketing and sales. In the first half of the year, Amazon.com spent $46 million (22.7% of sales) on marketing and sales campaigns, spending $26 million alone in the second quarter.

Commenting on the second quarter as well as Amazon.com's future, company CEO Jeff Bezos said he is planning to maintain Amazon's high level of investment. He noted that Amazon.com's expansion into Germany and the U.K., as well as the opening of its music store, "will continue to require aggressive investment and entail significant execution challenges."

During the quarter, Amazon.com reported that the number of customer accounts increased by 880,000, giving the online bookseller 3.14 million customers as of June 30. Repeat customer orders represented more than 63% of orders placed during the second period.

The company also recently announced that it had hired Jimmy Wright to the new position of vice-president and chief logistics officer. Wright had previously served in a number of logistic management spots at Wal-Mart. At Amazon.com, Wright will be responsible for all global supply chain activities, including management of the company's distribution centers, product purchasing, distribution and shipping.
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