Amazon Units Sold Up 17% in Peak Day, Down From 35% in ‘07 Peak Day

I was waiting to see whether Amazon put out a press release on their holiday season this year to confirm my thesis that the company is taking share from both online and offline competitors. So this news is very confirming – see my prior write-up here. But there are a few observations worth noting that may not be all that positive:


1. The busiest day of the year was pushed back to Dec. 15th from Dec. 10th in 2007, and Dec. 11th in 2006. It could be that customers were apprehensive about making purchases this year, and in that case, did not make purchases in the preceding days of the month, waiting until they ascertained their comfort level this holiday season. That would be a negative. However, it could also mean that customers become comfortable with shipping times and continued to shop until that date. That would be a positive. Or the shift in the peak date could just reflect the fact that there were 5 fewer shopping days this holiday season.

2. Units sold on the busiest day of the year were 6.3 million units up 17%. The growth rate was cut in half from 35% in 2009, so on the surface the deceleration looks like a clear negative. But going back in history there hasn’t been a strong correlation between revenue growth for the entire quarter and units sold on the peak day –as there shouldn’t.



But I do note that Street estimates are calling for 4Q revenue growth of 16% in 4Q. Amazon did note on the 3Q08 call that they saw a pull back in purchases for higher priced items. Thus, it will depend on the mix of the units sold that will determine whether Amazon meets that revenue estimate.

Overall, no clear conclusion can be made about this news. The stock was up about 5% initially on the headline news, I suppose because it reassured investors that the business hasn’t stalled. I am still holding on to my thesis that the stock can appreciate by 20% in 2009.