Amazon saw a 27% surge in sales during the first quarter of 2020, but profits at the online retailer — which has vowed to spend all the next quarter's projecting operating profits on tackling the coronavirus crisis — actually fell 30% year on year.
In its results for the three months to 31st March 2020, total net sales increased to $75.5bn from $59.7bn during the same period last year. Sales at its international division, which includes the UK, were up from $16.2bn to $19.1bn.
However, the company's net income shrank from $3.6bn to $2.5bn compared to 2019, partly owing to increased operating costs over the period from $55.3bn to $71.5bn.
In a statement, c.e.o. Jeff Bezos said: “From online shopping to Amazon Web Services to Prime Video and Fire TV, the current crisis is demonstrating the adaptability and durability of Amazon’s business as never before, but it’s also the hardest time we’ve ever faced.”
He warned shareholders the firm planned to spend the entirety of its expected $4bn second-quarter operating profits to mitigate the coronavirus. This would include personal protective equipment, enhanced cleaning of facilities, social distancing measures, higher wages and coronavirus testing capabilities.
He said: “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.
He added: “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.”