In the face of an epidemic that saw inflation fall to its highest level in four decades, Amazon on Thursday posted its slowest quarterly growth in years and its first quarterly loss since 2015.
The company posted revenue of $ 116.4 billion in the first three months of the year, up 7 percent from a year earlier. It was down 44 percent in the first quarter of 2021. The number of products sold to Amazon was flat in the quarter a year ago, and the cost of selling those items also increased.
Amazon lost $ 3.8 billion in the quarter, including a $ 7.6 billion drop in the value of its investment in electric truck maker Revion Automotive this year. Amazon’s consumer businesses also suffered losses in North America and internationally, although its cloud services division continued to grow and make money.
The results fell far short of Wall Street’s expectations, causing Amazon’s share price to fall more than 10 percent in after-hours trading.
“Our teams are fully focused on improving productivity and cost efficiency across our fulfillment network,” Andy JC, the company’s chief executive, said in a statement. “We know how to do this and have done it before. This may take some time, especially when we are working under the current inflation and supply chain pressures.”
The company’s forecast for the current quarter, with an increase of 3% to 7% in sales, indicates that its growth may remain slow. Amazon said Prime Day, its annual deals event, which took place in June last year, will move into the third quarter of this year, further reducing sales growth in the current quarter.
Amazon has benefited from the coronavirus epidemic as people flock to online shopping. But as vaccines have become more widespread and inflation has reached 8.5 percent in March, behavior has changed again. According to Commerce Department data released on Thursday, consumer spending on non-durable products such as the ones most frequently bought on Amazon fell 0.6 percent in the first quarter compared to the last three months of 2021, when adjusted for inflation.
Finance chief Brian Olsawsky said in a call to reporters that the company was “very happy” with how often consumers were shopping on Amazon and that some of the recession reflected the end of epidemic shopping habits. Consumers made more frequent, low-cost purchases like masks a year ago and are now returning to regular shopping patterns, he said.
Amazon has also faced rising costs, with operating costs for its consumer business rising 16 percent in North America, though sales in the region grew by only 8 percent in the quarter. Added ખર્ચ 2 billion to the cost of inflation, Mr. “We expect them to be around for a while,” Olsawski said.
Another $ 4 billion was due to inefficient management, he said. Amazon has spent heavily over the past two years doubling the size of its warehousing infrastructure and doubling the size of its warehousing infrastructure, including opening nationwide delivery depots that allow its network of contractors to quickly deliver packages to people’s homes.
Mr. Olsawski said the company is pulling back on some of its expansion plans to maximize the space it currently holds more efficiently.
“We have a lot of space right now against our demand patterns,” he said. Without the unexpected increase in demand driven by the virus, he said, “we can tighten our capacity.”
At one point in mid-March, Amazon forced employees in many warehouses to take time off without pay because customer demand was weak.
In response to rising costs, Amazon has increased prices for consumers and sellers in its marketplace. The price of its prime membership program increased from $ 119 in February to $ 139, the first increase since 2018. This month, the company announced additional “fuel and inflation” fees for sellers whose inventory it warehouses and delivers to customers.
Labor shortages have recently cost Amazon billions of dollars as it has responded by raising wages and offering other incentives. With a total of 1.62 million employees, the company barely increased its workforce during the quarter.
The company has faced a surge in labor activism. In April, workers at a warehouse on Staten Island voted to unionize the first Amazon facility in North America.
Amazon also has bright spots in its business. Amazon Web Services, its cloud computing business, saw its sales grow 37 percent to $ 18.4 billion in the quarter.