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In the face of the highest inflation levels in four decades, Amazon said on Thursday. Quarterly recorded slowest growth over the years.
The company reported revenue of $116.4 billion in the first three months of the year, up 7 percent from the previous year. This was lower than the 44 percent sales growth in the first quarter of 2021. The number of products Amazon sold this quarter remained flat from a year ago, and the costs of selling those products also increased.
Amazon lost $3.8 billion this quarter for the first time since 2015. The damage included a $7.6 billion drop in investment value in the US. Rivian Automotive, an electric truck manufacturer whose shares have fallen this year. While the cloud services division continues to grow and monetize, losses have also come from Amazon’s consumer businesses in North America and internationally.
The results fell far short of Wall Street’s expectations, causing Amazon’s share price to drop more than 10 percent in after-hours trading.
“Our teams are focused on improving productivity and cost efficiency across our fulfillment network,” said Andy Jassy, the company’s CEO, in a statement. “We know how to do this, and we’ve done it before. This may take some time, especially when working on ongoing inflationary and supply chain pressures.”
The company’s forecasts of 3 percent to 7 percent increase in sales for the current quarter indicated that its growth may continue to slow.
Amazon took advantage of the coronavirus pandemic as people flocked to online shopping. But as vaccines become more widespread and inflation rises, Reached 8.5 percent in March, shoppers have become more timid. Consumer spending on the types of non-durable goods people often buy on Amazon, according to Commerce Department data released Thursday. 2.5 percent drop In the first quarter compared to the last three months of 2021.
Faced with rising costs, Amazon has increased prices for customers and sellers in its marketplace. Price of Prime membership program It rose to $139 in FebruaryAt $119, it’s the first increase since 2018. The company announced this month an additional “fuel and inflation” fee for vendors where it stores its inventory and delivers it to customers.
At some point in mid-March, Amazon forced employees at several warehouses to take unpaid leave due to weak customer demand.
Labor shortages have also cost Amazon billions of dollars lately as it responds by raising wages and offering other incentives. The company barely expanded its workforce this quarter, with a total of 1.62 million employees.
The company has also faced a surge in labor activism. In April, workers at a Staten Island warehouse voted to become the first Amazon facility to unionize in North America.
Some investors are optimistic that costs will decrease. Amazon has spent a lot of money expanding its own storage infrastructure, including opening delivery warehouses that allow its nationwide network of contractors to quickly bring packages to people’s doorsteps.
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