- Earnings in first three months equivalent to $33m an hour
- Company says it will spend on PPE, cleaning and higher wages
Amazon emerged as one of the big winners of the coronavirus pandemic on Thursday, announcing it had revenues of $75.4bn in the first three months of the year – over $33m an hour.
The boom in sales, 26% higher than the same time last year, came at a cost, as profit fell 29% from a year earlier to $2.5bn. And the company said there was more spending to come.
Jeff Bezos, Amazon’s founder, said the company’s shareholders should “take a seat” because the company planned to spend $4bn or more in the next three months on coronavirus-related expenses, including getting products to customers and keeping employees safe.
Bezos said: “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.”
The $4bn spend will be equal to Amazon’s entire profit for the next quarter, and its shares sank on the news.
Amazon’s net sales rose to $46bn for the first quarter, up from $35.8bn for the same period last year.
The company also benefitted from a $10.3bn boost from Amazon Web Services, its web hosting service, which counts Netflix among its clients as well as the World Health Organization.
Other retailers, including Macy’s and Nieman Marcus, have laid off thousands of employees and are struggling to stay in business. Amazon, meanwhile, has been hiring at a furious pace to keep up with demand from customers stuck at home thanks to quarantine orders across the US. In the past two months it has announced plans to take on another 175,000 employees.
The boom in sales has further added to Bezos’s enormous wealth. Already the world’s richest man, Bezos has seen his fortune swell by $13bn this month to $145bn, as Amazon’s share price hit new highs. He is the biggest winner among a number of billionaires who have added $308bn to their wealth amid the crisis.
The lockdown has created a situation not unlike the one Amazon experiences on Black Friday, the annual pre-Christmas shopping bonanza, and its own annual Prime Day sale, said US investment bank Cowen. It wrote: “Amazon has seen an ‘enormous increase in demand’ as shoppers are forced to stay home, essentially creating an extended Prime Day/Black Friday type of situation.”
While Amazon’s soaring sales have boosted its fortunes, workers at Amazon warehouses and its Whole Foods supermarket chain have protested that the company has not done enough to protect them from the coronavirus. Protests are planned at some of its sites on Friday.
Derrick Palmer, an Amazon employee at the JFK8 warehouse in Staten Island, New York, who has worked at Amazon for over four years, said: “Right now, Amazon workers are very depressed. We feel like it’s either stay home and let bills pile up or go to work and possibly get sick.”