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Amazon enjoys strong start to 2014

Amazon continues to power ahead with record first quarter sales, solid bottom line improvement and intriguing new initiatives to drive future performance.

Sales increased 23% to $19.7 billion during the quarter ended March 31, compared to $16 billion the prior year. The sales figure was comprised of product sales which grew 18.3% to $15.7 billion and service sales which grew 44% to slightly more than $4 billion. The company’s fulfillment costs increased 29% to $2.3 billion.

Net income increased to $108 million, or 23 cents a share, compared to $82 million, or 18 cents in the first quarter the prior year.

In typical fashion, Amazon founder and CEO did not comment on the company’s financial performance, but did note that, “We get our energy from inventing on behalf of customers, and 2014 is off to a kinetic start.” He then went on to add that the company’s, “device team launched Fire TV, offering great content, including our recently announced exclusive deal with HBO, and innovative features like unified voice search, which we’re delighted is being adopted by so many new partners, including Netflix, HBO Go, Hulu Plus, Crackle and Showtime Anytime.”

“The team is working hard to keep Fire TV in stock. Our retail team launched Prime Pantry, a new option available only to Prime members offering exclusive access to everyday essentials in non-bulk sizes — ranging from breakfast foods and popular soft drinks, to cleaning and personal care items,” Bezos said.

The Prime Panty service is of particular interest to CPG companies and retail competitors because it offer Amazon Prime members access to low-priced everyday essentials in everyday sizes. Available nationally, Prime customers can buy as much or as little as they want and have items delivered to their home. The assortment include products such as beverages, bottled water, a new range of paper and laundry products in popular pack sizes, single boxes of breakfast cereal, potato chips, convenience-sized personal care products and more. There is a flat fee of $5.99 per Prime Pantry box.

The company also introduced Dash, a shopping device that allows Prime Fresh customers to shop hundreds of thousands of items — ranging from groceries to household essentials — from anywhere in their home without having to browse the AmazonFresh website or app. Dash works directly with a customer’s AmazonFresh account and allows users to scan items or say the items they want and Dash finds the products.

Amazon said it expect sales during its second quarter to growth between 15% and 26% to a range of $18.1 billion to $19.8 billion.