Amazon swung to a loss in the first quarter of the year as the boom in online demand it saw during the pandemic started to falter.
In the three months to March 31, the US retail giant reported a net loss of 3.8 billion dollars compared to a profit of 8.1 billion dollars a year earlier.
The company said its investment in electric vehicle company Rivian had a big impact on its profits.
Analysts surveyed by Refinitiv had expected a profit of 4.4 billion dollars in the first quarter.
Shares in the retailer were down 10 percent in post-market trading on Friday.
Amazon was one of the big winners during the pandemic as lockdowns accelerated consumers’ shift to online channels.
But that trend seems to have faded now that economies have reopened. Online sales at Amazon slipped 3 percent to 51.1 billion dollars during the quarter.
Net sales came in at 116.4 billion dollars, representing growth of 7 percent year-over-year. That’s compared to the year-over-year growth of 44 percent it reported in the first quarter of last year.
Supply chain pressures
“The pandemic and subsequent war in Ukraine have brought unusual growth and challenges,” Amazon CEO Andy Jassy told investors.
He said the company is now focused on improving productivity and cost efficiencies throughout its fulfillment network.
“This may take some time, particularly as we work through ongoing inflationary and supply chain pressures, but we see encouraging progress on a number of customer experience dimensions, including delivery speed performance as we’re now approaching levels not seen since the months immediately preceding the pandemic in early 2020,” Jassy said.
Looking ahead at the second quarter, Amazon expects anything between an operating loss of 1 billion dollars and an operating profit of 3 billion dollars.
It expects Q2 net sales of between 116 billion dollars and 121 billion dollars, representing year-over-year growth of between 3 percent and 7 percent.