Amazon predicts slower sales growth in the third quarter as a stimulus to the COVID-19 pandemic. Customers turned to Amazon and other online platforms during the Covid crisis, which resulted in record profits for the US giant.
Amazon’s tremendous growth began to catch on as customers returned to brick and mortar stores. Amazon stock is down more than 7% in after-hours trading.
At the start of the Covid pandemic, Amazon reported record profits, registered more than 200 million customers on its Prime service and employed more than 500,000 workers to meet growing demand.
But the release of the vaccine and the easing of restrictions have led some consumers to shop while using click-through and pick-up services, competing with the fast delivery of online orders from Amazon and its peers.
Amazon’s net sales rose to $113.08 billion for the second quarter ended June 30, from $88.91 billion a year ago. Analysts reckon an average of $115.20 billion.
The world’s largest online retailer has postponed its annual Prime Day marketing bonus to June this year in hopes of selling more items before shoppers head off on vacation.
The event is said to be the biggest two-day selling period for traders on its platform.
However, in the second quarter, analysts saw signs of falling demand.
Last year Amazon biggest market North America rose its sales 22% on the second quarter and 43% in the same period.
Amazon profit increases 48% to $7.8 Billion Amazon announces this second highest quarterly result.
Bezos on the move
Retail giant Jeff Bezos stepped down as CEO on July 5 and became CEO of Amazon.
Andy Jesse took over the role previously in charge of Amazon’s cloud computing, Amazon Web Services (AWS).
In the second quarter, AWS was a bright spot with a 37% increase in revenue to $14.8 billion.
Mr Jassy said, “Over the past 18 months, our consumer business has been challenged to supply an unprecedented amount of goods, including PPE, groceries and other products, that have helped communities around the world cope with the dire state of the pandemic.
Amazon is the latest big tech result of the week. Apple, Microsoft, and Google’s parent company, Alphabet, reported rising profits in the wake of the ongoing Covid-19 pandemic. However, Facebook expects revenue growth to slow.