Detailed sales figures: Best Buy Co., Inc. (NYSE:BBY) reports its sales in (count ’em) six categories: consumer electronics, computing and phones, entertainment, appliances, services, and other. Reviewing that list, an investor can see that the retailer’s electronics sales fell hard last quarter, while appliances and phones picked up some of the slack. And yet Amazon, the world’s biggest e-tailer, splits its $61 billion of sales reporting into just three segments (media, stuff, and other stuff):
Blast from the past
CEO Jeff Bezos made a simple promise in his 1997 letter to shareholders (and in every annual report since). He said: “We will share our strategic thought processes with you when we make bold choices (to the extent competitive pressures allow), so that you may evaluate for yourselves whether we are making rational long-term leadership investments.”
It’s true that competitive pressures are still around, just like they were back in 1997. And you could argue that some of these mysteries exist to keep rivals, not investors, in the dark. But competitive pressures should be balanced against the goal of having informed shareholders, who are treated like the business partners they are.
Amazon’s shares are trading for just under twice last year’s sales figure. That’s well more than Costco’s and Wal-Mart Stores, Inc. (NYSE:WMT)‘s multiples, which are roughly 0.5 times sales. But Amazon has a lot more going for it than just physical retailing. Its sales multiple looks cheap compared to the ones that Apple and eBay Inc (NASDAQ:EBAY) are fetching now. Is two times sales a fair price to pay given all the strengths and risks in Amazon’s business? I don’t know.
The article 5 Things You Don’t Know About Amazon originally appeared on Fool.com and is written by Demitrios Kalogeropoulos.
Fool contributor Demitrios Kalogeropoulos owns shares of Apple, Netflix, and Costco Wholesale (NASDAQ:COST). The Motley Fool recommends Amazon.com, Apple, Costco Wholesale, and Netflix. The Motley Fool owns shares of Amazon.com, Apple, Costco Wholesale, and Netflix.
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