Global boom for Amazon sales

SALES at Amazon.com, the world's largest online retailer, jumped 41% in the first three months of the year on the back of aggressive price cuts, free shipping and weakness in the dollar.

But the shares slipped $1.36, or 2.8%, to $47.50 in late US trading because its forecast sales for the second quarter were at the lower end of analysts' estimates.

Amazon said first-quarter sales rose from $1.08bn to $1.51bn but that, in the coming three months, sales would be between $1.34bn and $1.44bn, which would represent growth of between 22% and 31%.

It pointed out that this year's second quarter would not have the boost seen in the same quarter last year from the release of JK Rowling's Harry Potter and the Order of the Phoenix, of which it sold 1.4m copies worldwide.

It is also almost a year since dollar weakness set in, so the benefit of foreign exchange difference will be lessened in this quarter. However, for the full year, Amazon raised its sales forecast from a top figure of $6.7bn to $6.85bn.

It also produced a third consecutive quarterly profit, with net income of $110m against a net loss of $10m a year ago.

For the first time, half of all goods were delivered to addresses outside the US, with international operations in Britain, Germany, France and Japan increasing sales by 80% to $68m.

Excluding the benefits of the strong euro and pound against the dollar, international sales grew 58%.

International managing director Robin Terrell said: 'We had a very good January sale in the UK and other countries, with books and DVDs shifting very fast.

'We also launched our largest new [online] store for some time with DIY tools carrying several thousand lines. It opened on 24 March and we don't expect to see the results until the second quarter when people start going out into the gardens.'

Chief executive Jeff Bezos, 40, announced that the group is to launch into selling jewellery in the US, having tested the new site on more than 100,000 customers. He said: 'While the average margin in jewellery retailing is approximately 45% to 50%, we target substantially lower margins and even lower - about 13% - on diamond jewellery. This is in keeping with our strategy of driving growth through lower prices.'

But some US analysts were questioning his strategy, suggesting he was following bricks and mortar retailing giant Wal-Mart in seeking to drive high sales volume at low margins.