Amazon and Walmart, two of the world's largest retailers, have both reported strong first-quarter earnings, highlighting their dominance in the retail market despite ongoing supply chain challenges and labor controversies.
Amazon's Q1 2024 earnings report showcased impressive growth, with net sales increasing 13% year-over-year to $143.3 billion, up from $127.4 billion in Q1 2023. This growth was driven by strong performance across its key business segments, notably Amazon Web Services (AWS), which saw a 17% increase to $25 billion. North American sales rose 12% to $86.3 billion, and international revenue grew 10% to $31.9 billion.
Profitability also surged, with net income jumping to $10.4 billion, a 225% increase from the previous year's $3.2 billion. Operating income rose to $15.3 billion, compared to $4.8 billion in Q1 2023. Fulfillment costs, encompassing expenses for running fulfillment centers and logistics facilities, increased 6.6% to $22.3 billion. This rise matched the growth in online store sales, a rare alignment that highlights Amazon's efficiency improvements.
Walmart also reported strong results, with Q1 2024 revenue rising 6% to $161.51 billion from $152.3 billion in the same period last year. The company's profits increased to $5.10 billion, or 63 cents per share, up from $1.67 billion, or 21 cents per share, in the previous year. Adjusted earnings per share were 60 cents, surpassing analyst estimates of 53 cents.
Walmart's U.S. e-commerce sales grew by 21%, driven by robust online delivery services and a third-party marketplace. The retailer delivered 4.4 billion items in the past 12 months, with 20% of those items delivered in under three hours. Walmart continues to attract higher-income households and is focusing on private brands to cater to price-sensitive customers amid persistent inflation.
Both Amazon and Walmart have made significant strides in optimizing their supply chains, especially when it comes to home delivery. Earlier this month, Walmart introduced ultra late-night delivery allowing customers to receive deliveries 18 hours a day, from 6:00 a.m. to 12:00 a.m.
“Over the last 12 months, 4.4 billion items were delivered same or next day, with about 20% of those delivered in under three hours,” said CEO Doug McMillan during the company's earnings call. “Delivery times are getting faster, and the cost of delivery is coming down at the same time.”
Amazon continues to add improvements to its menu of delivery options including a new $9.99 monthly plan for unlimited grocery delivery. Overall, the company continues to thrive, tripling its shipping volumes from 2019 to 2023.
Despite their financial success, both companies face scrutiny over the treatment of their warehouse workers. A recent report by the Center for Urban Economic Development (CUED) at the University of Illinois Chicago (UIC) revealed that half of Amazon's warehouse workers can't afford basic necessities like food and shelter, while employees at warehouses for both companies complained of excessive monitoring while trying to work.
These issues have sparked calls for better labor practices and greater transparency in how these companies manage their vast logistics operations.