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Amazon reports strong Christmas trading but forecasts first-quarter profit dip

Amazon has announced a 22% net increase in sales to $43.7bn (£34.9bn) in the fourth quarter of 2016, and a 27% rise in revenue to $136bn (£108.6bn) for the full year 2016. 

However, it anticipates a drop in its 2017 first quarter profit compared with 2016.

Operating income for the first quarter of 2017 is expected to be between $250m (£199.6m) and $900m (£718.7m), compared with $1.1bn (£880m) in first quarter 2016, as the company invests in logistics and its Prime video streaming services.

Amazon announced operating profit for the full year 2016 had almost doubled, up to $4.2bn (£3.35bn) compared with $2.2bn (£1.76bn) in 2015.

Despite delivering positive sales figures over the Christmas trading period, Amazon slightly missed sales expectations. Reuters had predicted fourth quarter sales of $44.68bn (£35.68bn), while achieved sales were $43.7bn (£34.9bn). Amazon’s shares fell 3% overnight after the announcement.

Amazon said fashion was one of its fastest-growing categories during the fourth quarter: more than 60 million fashion items were sold across Europe during the period. Amazon said fashion and groceries were a key focus in the UK. More than 350 new fashion brands were added to the site during last year, including House of Holland, LK Bennett and Aldo.

Last year the AmazonGo store – the etail giant’s first physical grocery store – was launched in Seattle, and Amazon debuted its Alexa voice-activated electronic assistant.

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