Amazon's earnings included a negative number, but the company said it doesn't matter

Getty/John LeybaWhole Foods is expanding rapidly into delivery and pickup.
  • Amazon’s fourth-quarter earnings release included a physical-store sales number that confused some observers.
  • Sales were down 3% compared to the year prior, which included most Whole Foods sales.
  • Amazon explained that last year’s fourth quarter had five additional days of sales. Plus, Amazon has moved Whole Foods sales that start online – for delivery via Prime Now, for example – to its online stores category.
  • It remains to be seen how sales from physical stores will fit into Amazon’s broader strategy.

One stat in Amazon‘s fourth-quarter earnings reported raised some eyebrows.

It reported a 3% decrease in sales from physical stores compared to the same quarter a year prior. That appears significant, as this was the first year-over-year comparison Amazon had reported for Whole Foods since it acquired the grocery chain in 2017.

Amazon executives threw cold water on any speculation about a decline in sales at Whole Foods during the earnings call with analysts, however.

CFO Brian Olsavsky said the decline was mostly due to an accounting change. In the fourth quarter of last year, Amazon lined up Whole Foods’ fiscal calendar with its own, resulting in five extra days of revenue in the fourth quarter of 2017.


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Amazon also launched its Whole Foods grocery pickup and delivery services – which it offers through Prime Now – to cities across the country throughout 2018. Those sales are counted in Amazon’s online revenue instead of with its physical store sales.

Adjusting for those two factors, Whole Foods sales are up 6% year over year, Olsavsky said during the call with investors.

That does leave the rest of Amazon’s physical store initiatives, including Amazon Books, without any reliable way to discern sales growth or lack thereof. It will be a while before we get any hard data on Amazon’s fleet of Go or 4-star stores, both of which rapidly expanded in 2018 and are poised to grow further in 2019.

It also means that online sales at Whole Foods have likely boosted online sales, contributing to a rosier outlook than otherwise would have been reported. Analysts from Nomura Instinet wrote in a note to investors on Friday that Whole Foods sales contributed an estimated 1% of the 12.5% online stores sales growth.

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