Amazon sales growth slows as pandemic lockdown eases

Amazon.com on Thursday said sales growth would decelerate in the third quarter as customers leave their homes more.

While revenue grew by 44 percent in the first quarter of this year, that figure dropped to by 27 percent to $113 billion for the period ended June 30, below most Wall Street forecasts. Sales may only grow as much as 16 percent in the third quarter, sparking a slide of some seven percent in after-hours trading.

Brian Olsavsky, Amazon’s chief financial officer, attributed this to a difficult comparison to last year, when consumers stayed more indoors and relied on e-commerce for their everyday needs. In the United States and Europe, customers are now out and about.

They are “doing other things besides shopping,” he said.

Amazon expects this lower growth to continue for the next few quarters, Olsavsky told reporters.

Profit rose by 48 percent to $7.8 billion, the second-largest quarterly result Amazon ever announced.

Amazon said it expects operating income for the current quarter to be between $2.5 billion and $6.0 billion, which assumes $1 billion in costs related to COVID-19.

Amazon Web Services has fared better. The cloud computing division grew revenue by 37 percent to $14.8 billion, ahead of estimates of more than $14.1 billion.

The Amazon results capped a series of earnings from major tech firms highlighting surging profits and revenues as digital lifestyles and work-from-home trends continue even with the end of most pandemic lockdowns.

Tech rivals Facebook, Apple, Microsoft and Google parent Alphabet all reported higher revenues and profits even as they faced heightened scrutiny from antitrust regulators for their growing dominance of key economic sectors.

 

Share This Post:

Add Comment