Amazon Shows Staggering Q1 Earnings at $75.5 billion
Amazon has announced their staggering first-quarter earnings. While the company has always shown significant growth YoY, their 2020 Q1 earnings show the company’s increasing e-Commerce dominance, even in the face of a global pandemic.
Amazon states that their net sales increased 26% in the first quarter reaching $75.5 billion. This in comparison to 2019 Q1 with net sales at $59.7 billion.
Jeff Bezos was quick to credit Amazon’s ability to quickly react to the global situation, and their large product and service offering also deserves credit for their Q1 success. “From online shopping to AWS to Prime Video and Fire TV, the current crisis is demonstrating the adaptability and durability of Amazon’s business as never before,” Bezos said.
As the country, and world continue safe social-distancing practices, there is a continued demand for e-Commerce. With this in mind, Amazon can only expect this growth to continue, in addition to their yearly Prime sale (TBD whether or not this sales event will be delayed). However, Amazon doesn’t plan on pocketing those profits. Jeff Bezos gave fair warning to shareholders:
“If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small. Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit. But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe. This includes investments in personal protective equipment, enhanced cleaning of our facilities, less efficient process paths that better allow for effective social distancing, higher wages for hourly teams, and hundreds of millions to develop our 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. I’m confident that our long-term oriented shareowners will understand and embrace our approach, and that in fact they would expect no less.”
As we head into the second half of the year we are left with the following questions:
- How will Amazon continue to provide a safe and productive work environment for its warehouse and Whole Foods employees?
- Will sales slow as brick-and-mortar stores begin to re-open?
- Will Amazon push or keep their annual Prime Day sales event (typically occurs the second week of July)?
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