Amazon: 26% increase in net sales in Q1

Net sales at Amazon grew 26% to $75.5 billion in the first quarter of the year (Q1). Measures to maintain safety for its employees and customers are set to cost the company more than $4 billion in Q2.

Among the financial highlights:

  • Net sales increased 26% to $75.5 billion in the first quarter, compared with $59.7 billion in first quarter 2019. Excluding the $387 million unfavourable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 27% compared with first quarter 2019.
  • Operating income decreased to $4.0 billion in the first quarter, compared with operating income of $4.4 billion in first quarter 2019.
  • Net income decreased to $2.5 billion in the first quarter

“The current crisis is demonstrating the adaptability and durability of Amazon’s business as never before, but it’s also the hardest time we’ve ever faced,” said Jeff Bezos, Amazon founder and CEO. “We are inspired by all the essential workers we see doing their jobs — nurses and doctors, grocery store cashiers, police officers, and our own extraordinary frontline employees. The service we provide has never been more critical, and the people doing the frontline work — our employees and all the contractors throughout our supply chain — are counting on us to keep them safe as they do that work. We’re not going to let them down. Providing for customers and protecting employees as this crisis continues for more months is going to take skill, humility, invention, and money.

“If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small. Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit. But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe.

“This includes investments in personal protective equipment, enhanced cleaning of our facilities, less efficient process paths that better allow for effective social distancing, higher wages for hourly teams, and hundreds of millions to develop our own COVID-19 testing capabilities. There is a lot of uncertainty in the world right now, and the best investment we can make is in the safety and well-being of our hundreds of thousands of employees. I’m confident that our long-term oriented shareowners will understand and embrace our approach, and that in fact they would expect no less.”

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