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Amazon says 2008 ‘best ever’ holiday season

By JC | December 26, 2008

Amazon.com Inc. (AMZN) said this Friday that the 2008 Holiday season was the “best ever” for them. This comes as a surprise considering the current state of the economy and consumer sentiment.

Although no revenue estimates were provided, this holiday season may prove Amazon’s strength. Earnings are not likely to be spectacular as there is a lot of price pressure, but looking forward, the volume of traffic and sales Amazon is able to generate should be key earnings drivers in future quarters as the economy recovers. Investors should be careful of this quarter though as it was a shortened holiday season and pricing is likely to hurt the bottom line of both retailers and Amazon.

Amazon has been able to grow its business successfully and develop an infrastructure that is starting to really pay off. Most notably, Amazon has been able to offer a wide variety of products, services and convenience that is making it the de facto place for online shopping. As consumers shift to seeking better pricing, the cost structure of online retailers allow them to offer competitive prices and value to consumers (through product and price comparison, recommended similar products and other customer’s reviews). Amazon is likely to do relative well in the future and we are currently bullish on AMZN shares long term.

Related retailers often followed on Sum of Some had holiday strengths to report as well. Today’s Amazon’s Press Release included a list of Hot Holiday Bestsellers. Apple’s (AAPL) iPod Touch was one of the leading consumer electronics top sellers. Samsung’s 52-inch LCD TV (with prices discounted about 30% from the list price), and Acer Inc.’s Aspire One 8.9” notebook were among top sellers also figured in the list. Finally, the Nintendo Wii console and peripheral items also dominated the list. Analyst have worried Nintendo sales had slowed down, yet it remains the best selling console.


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