Amazon’s sales surged during a period of economic standstill caused the coronavirus pandemic, but costs related to the pandemic ate away at the online retailer’s profits, the company told investors Thursday.
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Net sales increased 26 percent to $75.5 billion for the January-March quarter, compared to $59.7 billion during the same period a year earlier, Amazon announced.
The Seattle-based company netted $2.54 billion in the quarter, a profit of $5.01 per share, which fell short of analysts’ expectations even as revenue beat projections.
The company touted its efforts to protect employees and provide essential products amid the pandemic that has sickened more than 1 million Americans.
“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,” CEO Jeff Bezos said in a written statement. “Providing for customers and protecting employees as this crisis continues for more months is going to take skill, humility, invention, and money.”
Amazon is expecting sales to grow somewhere between 18 and 28 percent, to $75-$81 billion, in the current quarter.
However, Bezos said Amazon would spend $4 billion in expected operating profit during the second quarter on coronavirus-related expenses, including personal protective equipment, enhanced facilities cleaning, lost efficiency to social distancing and higher pay for hourly workers, as well as the development of the company’s 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,” Bezos said.
Amazon’s stock price fell more than 1 percent in after-hours trading Thursday.