Amazon.com Inc. (NASDAQ: AMZN) posted revenue of $35.7 billion in its most recently reported quarter, up 22% from the same quarter a year ago. Wall Street was disappointed not only with sales but Amazon’s forecasts. Lost among the disappointment is that Amazon’s revenue has hit half of that of Wal-Mart Stores Inc. (NYSE: WMT) in the United States, a milestone that seemed impossible just a few years ago.
The U.S. revenue of Wal-Mart, based on its most recent quarterly numbers, was $72.2 billion, up 3.8%. Operating income for the segment was $4.5 billion, down from $4.9 billion in the same quarter a year earlier. Amazon’s quarterly net income for the period just announced was $1.1 billion, which is pathetic next to the Wal-Mart number. However, the net number was a jump of 88%.
Critics of a comparison between Wal-Mart and Amazon would say that Amazon’s revenue includes its international sales and Amazon’s cloud operations, known as Amazon Web Services. Fair enough. In North America, Amazon’s revenue was $21.5 billion, up 24%. On that basis, Amazon’s North American sales are 30% Wal-Mart’s U.S. revenue.
Wal-Mart’s domestic sales come from 3,916 supercenters and discount stores. Many analysts would say the store count is a curse because operating the locations is so expensive. Due in part to this, Wal-Mart has been attacked because of its inability to increase its online sales rapidly. Therefore, it has been buried by Amazon’s market share.
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It seems likely that Amazon’s revenue eventually will catch Wal-Mart’s in the United States, and with very few physical retail locations. Even if Wall Street has turned its back on Amazon, at least temporarily, its numbers against those of Wal-Mart are extraordinary.
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