FINANCE

Amazon loss grows in Q2 even as sales rise 23%

BY Dan Berthiaume

Seattle – Amazon.com reported a second quarter net loss of $126 million, compared to a net loss of $7 million in the same period last year, as it continues to spend heavily on investments. The loss was nearly double what Wall Street higher expected. Operating expenses rose 24% to $19.36 billion.

Net sales increased 23% to $19.34 billion in the second quarter, compared with $15.70 billion in second quarter 2013. Net sales met Wall Street expectations. A favorable change in foreign exchange rates boosted revenues.

Amazon introduced a number of new products and services during the quarter, including the Fire smartphone (which started shipping July 24), Sunday delivery coverage to 25% of the U.S. population, European cross-border Two-Day Delivery for Prime, Prime Music with more than one million songs, and Kindle Unlimited, an ebook subscription service.

“We continue working hard on making the Amazon customer experience better and better,” said Jeff Bezos, founder and CEO of Amazon.com. “We’ve recently introduced Sunday delivery coverage to 25% of the U.S. population, launched European cross-border Two-Day Delivery for Prime, launched Prime Music with over one million songs, created three original kids TV series, added world-class parental controls to Fire TV with FreeTime, and launched Kindle Unlimited, an eBook subscription service. And today customers all over the U.S. will begin receiving their new Fire phones — including Firefly, Dynamic Perspective, and one full year of Prime — we can’t wait to get them in customers’ hands.”

For the third quarter, Amazon is forecasting an operating loss between $410 million and $810 million, compared with $25 million a year earlier. The company also expects third-quarter revenue between $19.7 billion and $21.5 billion, which is up to 26% higher than the year-ago period.

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OPERATIONS

Williams-Sonoma shuffles leadership

BY Dan Berthiaume

San Francisco – Williams-Sonoma Inc. has shuffled the positions of several top executives. Chief strategy and supply chain officer Dean Miller has been named COO, and chief marketing officer Pat Connolly will assume the position of chief strategy and business development officer.

In this role, Connolly will work closely with senior management to refine the company’s long-term strategy, including the development of new businesses, and the evaluation and execution of acquisitions and alliances. In addition, CIO John Strain has been promoted to the position of chief digital and technology officer. In this new role, Strain will assume additional responsibility for the company’s digital and direct marketing efforts.

Also Felix Carbullido has been promoted to the position of chief marketing officer, succeeding Connolly. He will oversee the marketing of all brands.

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FINANCE

Aaron’s Q2 profits slump; COO retires

BY Dan Berthiaume

Atlanta – A variety of costs drove net earnings for the second quarter of fiscal 2014 at Aaron’s Inc. down 67% to $8.5 million from $25.9 million in the same period a year earlier. Expenses related to Aaron’s April 2014 purchase of lease-to-own company Progressive Finance Holdings, as well as advisory and strategic costs and costs related to store closures, impacted net earnings.

However, the addition of Progressive Finance revenue, partially offset by declining core business revenue, helped increase revenue 22% to $672.5 million compared to $550.5 million for second quarter 2013. Same-store sales dropped 3%.

In addition, Dave Buck, 64, will retire as COO of Aaron’s after a 25-year career there. Effective Aug. 1, senior VP operations Tristan Montanero and Michael P. Ryan will be co-leaders of operations at Aaron’s, with Ryan being promoted to senior VP operations from VP franchising. Aaron’s named Scott Harvey, former VP operational support, to succeed Michael P. Ryan as the VP franchising.

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