Jeff Bezos to step down as Amazon chief as quarterly revenues top $125bn

Amazon founder Jeff Bezos is to step down as chief executive, the online giant said, as it posted quarterly sales of more than $125bn.

Multi-billionaire Bezos will become executive chairman in the third quarter of the current year, at which point Andy Jassy will take over as chief executive. Jassy heads up Amazon’s web services division, and has been with the company since 1997.

Bezos, who founded Amazon in 1994, said: "If you do it right, a few years after a surprising invention, the new thing has become normal. People yawn. That yawn is the greatest compliment an inventor can receive.

"When you look at our financial results, what you’re actually seeing are the long-run cumulative results of invention. Right now, I see Amazon at its most inventive ever, making it an optimal time for this transition."

The move will allow 57-year-old Bezos, the world’s richest man, to spend more time with his other business ventures.

In a letter to staff, he said: "Being the CEO of Amazon is a deep responsibility, and its consuming. When you have a responsibility like that, it’s hard to put attention on anything else.

"As exec chair I will stay engaged in important Amazon initiatives, but also have the time and energy I need to focus on the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and my other passions."

The announcement came as Amazon revealed how the Covid-19 pandemic and lockdown measures had helped generate record sales. In the three months to 31 December, net sales surged by 44% to $125.6bn, or by 42% if favourable exchange rates of $1.7bn were stripped out.

International sales, which account for around 30% of the group total, rose 57% to $37.5bn.

Operating income increased to $6.9bn from £3.9bn a year previously, while net income more than doubled to $7.2bn or $14.09 per diluted share. That compares to £3.3bn or $6.47 per share.

Amazon called the holiday season "record-breaking", with more than one billion items delivered worldwide, while Prime Day - a marketing event held on 13 and 14 October - saw the two biggest days ever for third-party selling, ahead 60% year-on-year.

Net sales at Jassy's Amazon web services unit, a core driver of growth for the business, rose from $10bn to $12.7bn, with operating income up from $2.6bn to $3.6bn.

For the full year, net sales rose 38% to $386.1bn, operating income increased to $22.9bn from $14.5bn and net income was $21.3bn, compared to $11.6bn a year previously.

Looking ahead to the current quarter, the group said it expected revenue growth of between 33% and 40% compared to the first three months of 2020, while operating income is likely to be between $3bn and $6.5bn, assuming $2bn of Covid-19 related costs. Operating income came in at $4bn in the first quarter of 2020.

Katie Cousins, analyst at Shore Capital, said: "Given the ongoing pandemic and national lockdown restrictions temporarily removing physical retail options, we would expect Amazon, as a global online e-commerce player, to continue to enjoy the increasing demand.

"The past 12 months have presented the group a unique opportunity to acquire new customers, not only onto the shopping platform but subscribed to the Prime offering. Incentives will be key, in our view, in retaining these customers, and we would expect investment to continue to growth the offering and services included within the membership."