Amazon lowers expectations after Covid records

Amazon posted sales of more than 100 billion dollars last quarter, for the third time in a row. However, new CEO Andy Jassy starts off on a downbeat because he is unable to match last year’s record figures.

People are doing other things

In the past second quarter, which was also the last quarter for founder Jeff Bezos as CEO, Amazon saw its sales grow by 27 %. It broke through the 100-billion mark for the third time in a row, reaching 113 billion dollars (95 billion euros).

However, the figures are seen mainly as a setback: growth has slowed considerably compared to the 41 % increase in sales a year ago and the turnover was two billion dollars lower than analysts had expected.

The reason is clear: last year was a record year for Amazon, as people sat at home through the lockdowns and resorted to e-commerce. Today, CFO Brian Olsavsky sees that people are once again “doing things other than shopping“, like travelling or eating out. As a result, the CFO also expects slower growth in the coming quarters, writes CNBC.

Multi-year investment cycle

Meanwhile, profits exceeded expectations, helped by the highly profitable cloud computing, subscription and advertising businesses. The business that includes services to platform partners in addition to advertising also accounted for a whopping 87 % increase in revenue in the previous quarter, while cloud division AWS grew by 37 %. It generated a positive net profit of 7.8 billion dollars (6.6 billion euros), 48 % more than last year.

Amazon, meanwhile, is in the middle of a multi-year investment cycle, according to Olsavsky. The technology giant plans to significantly increase its storage capacity in the second half of the year, especially in the US, while the company also continues to focus on services such as Prime Video. The acquisition of iconic Hollywood studio MGM in May plays a key role in this regard.