Amazon Sales Fall 10% After First Loss Since 2015
Amazon has reported its first loss since 2015, due in part to a 3% fall in online sales in the first three months of 2022, the online retailers shares fell 10% on the news.
Impacting the business is rising costs and the war in Ukraine with their International business which includes Australia falling 6%
Overall, Amazon reported a loss of US$3.8bn, much of which was driven by a hit from its investment in electric carmaker Rivian.
It forecast sales growth of as little as 3% in the coming months – a marked slowdown from the double-digit growth it has enjoyed in recent years, even before the pandemic.
Growth in other parts of its business, including cloud computing and advertising, remained strong.
The firm’s overall sales continued to rise, up 7% year-on-year to $116.4bn, powered by Amazon Web Services (AWS) – the company’s cloud-computing division and reliable profit driver.
Revenue will be $116 billion to $121 billion in the period ending in June, Amazon said overnight.
Analysts claim that Amazon has been grappling with higher energy and labour costs and changing shopping habits since its online store became essential for consumers during the pandemic.
First-quarter revenue from the main e-commerce business declined 3% from a year earlier.
Those sales had jumped 44% in the same period of 2021 as the delta variant of Covid-19 spread across the world.
During the period Amazon launched new Alexa voice capability with users of their voice activated system now able to ask Alexa about symptoms for common health ailments and possible causes.
In some parts of the world, they can connect directly with a health care professional.
They can also access more live and on-demand video content on Echo Show 15 through a new integration with Sling TV.
Amazon has also announced new detection capability for Ring, Abode, and Google devices.
With the new feature, customers can receive an announcement from Alexa, set up a Routine such as turning on a porch light, and automatically view live video feeds on Echo Show, Fire TV, and Fire tablet devices when a person or package is detected by their smart camera or video doorbell
AWS revenues were up 37% year-on-year, while advertising revenue was also strong, rising 23%.
But elsewhere growth showed marked slowdown – especially in its international business, where sales sank 6%.
Expenses are also rising rapidly. Inflation added $2bn in expense in the quarter, while costs more within the firm’s control also hurt, executives said. The company is also facing a widening unionising drive in the US.
Shares in the firm sank as concerns spread to other online retailers.