Amazon announces earning results for Q1 2020
Amazon recently released their Q1 earnings this month and, just like everything right now, the results were heavily affected by the COVID-19 pandemic.
Although the results seemed high compared to last year (most likely due to the increased number of sales during self-isolation), shareholders were told not to expect much profit short-term. This was so that Amazon could improve/maintain staff health and continue to bolster the marketplace’s delivery system in response to such a rapid increase in sales.
“Providing for customers and protecting employees as this crisis continues for more months is going to take skill, humility, invention and money” said Bezos. For this reason, he has stated that the company will be investing over $4bn into COVID-19 related support which will affect short-term profits.
Molzi’s CEO, Chris Mole decided to share his take on Amazon’s earnings with Chloe Rigby, Editor of Internet Retailing. Chris makes clear that although this drop in short-term profits only affects the shareholders and not its sellers. In fact, he believes that brands should remain cautiously optimistic. Chris believes companies “should take advantage of the policy changes aimed at supporting third-party sellers. These include the pause on loan repayments and relinquished fees for long-term storage.”
Other actions that Bezos claims Amazon is doing for customers includes; aggressively removing any price-gouged items, suspending accounts which break the fair-price policy and increasing order capacity for Prime Now and Amazon Fresh.
Bezos himself stated that the current crisis is the “hardest time” Amazon has ever faced since its foundation in 1994, and the company expects to see the repercussions of COVID-19 evident in their Q2 results as well due to the spend of approximately $4 billion related to combating the affects of the coronavirus. They expect their net sales to be between $75.0 billion and $81.0 billion, or to grow between 18% and 28% compared with second quarter 2019 however their operating income is expected to be between $(1.5) billion and $1.5 billion. This is lower than last year’s Q2 results of $3.1 billion.
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