Sales in Amazon.com's North America media division rose 9.7%, to $517.3 million, for the first quarter ended March 31, a much slower growth rate than that for the entire company, which posted a gain of 27.8%, to $1.08 billion. The net loss for the entire company was reduced to $10.1 million from $23.1 million in 2002.
Sales in the international segment's media group jumped 65.9% in the quarter to $355.7 million and accounted for the vast majority of Amazon's total international sales of $378.8 million. The gain in foreign sales was led by a 52% increase in unit sales.
Amazon has reclassified its reporting segments for 2003; the North America media group comprises all sales, including used items, in the books, music, DVD/video, magazine, software and videogame categories. Amazon executives offered little specifics about how the media group performed in the quarter, noting only that selection in the book group rose by 12%, due mainly to the addition of hard-to-find titles.
Both Amazon chief financial officer Tom Szkutak and chairman Jeff Bezos attributed the strong performance of the company mainly to lower prices, which drove an increase in unit sales. Total revenue in the North America division rose 13.3% in the quarter, to $704.7 million, while units increased 28%.
The strong increase in unit growth was due in part to the success of the e-tailer's used books (and other items) program. Sales of used items accounted for 19% of worldwide units sold in the period, up from 13% in last year's first quarter. Bezos said he doesn't think the sale of used products is cannibalizing the sale of new items. And Bezos made it clear that the sale of used products will continue, telling analysts that part of the company's growth strategy is to add more third-party sellers, broaden selection in existing categories, add new categories and expand into new countries. Bezos promised more price reductions although it wasn't clear if price cuts will be made on books; Amazon already offers a 30% discount on books priced over $15.
