Amazon recorded sales of $75.4 billion in the first three months of the year, a first-quarter record for the ecommerce giant, as many consumers stepped up their online purchases during coronavirus-fueled lockdowns.
North America sales rose 29%, while AWS — the company's cloud-computing segment — increased 33%, the company said in an earnings release. At the same time, the company's costs of fulfillment jumped 34% as it hired thousands of new workers and increased pay. Amazon posted an operating profit of $3.9 billion for the quarter, a nearly 10% drop from this period last year.
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," Amazon CEO Jeff Bezos said in a statement.
Bezos said the company would spend at least $4 billion on costs related to the COVID-19 outbreak in the coming three months, outlining an increase in personal protective equipment and pay bumps for workers, more intense cleaning of warehouses, and investments to develop internal coronavirus testing capabilities.
Some Amazon workers say those measures aren't sufficient. Amazon and Whole Foods workers have called for a strike on Friday, asking for better paid leave, more protective equipment and a reinstatement of workers who have been fired after speaking out.
Amazon's financial success stands in stark contrast with the many brick-and-mortar stores that have been forced to shut their doors during the pandemic.
"The numbers are frankly staggering," said Christopher Rossbach, portfolio manager of the J. Stern & Co. World Stars Global Equity fund, in a note. Amazon's $75 billion take translates into sales of nearly $10,000 per second, he calculated.
Despite Amazon's higher costs, the pandemic could very well work out in the company's favor if it uses the opportunity to ingratiate itself into customers' lives.
"The crisis will hopefully be short-lived, but the impact on Amazon could be profound over the long term, with over 150 [million] Prime members now active. Habits will form, and many of these people will shop more using Amazon in the future," Rossbach said.
First published on April 30, 2020 / 5:10 PM
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