Amazon shares tumble amid first loss since 2015

Amazon shares have taken a 10% hit after reporting a net loss of $3.8bn (£3.02bn) in the first quarter ended 31 March 2022 (Q1), due to inflationary and supply chain pressures, marking its first loss since 2015.

The net loss includes a pre-tax valuation loss of $7.6bn (£6.05bn), and Amazon’s operating income also decreased 58% year-on-year from $8.9bn (£7.09bn) to $3.7bn (£2.94bn) in the quarter.

Overall, international sales dropped from $30.64bn (£24.41bn) to $28.75bn (£22.91bn), although North America saw the biggest increase in sales from $64.36bn (£51.27bn) to $69.24bn (£55.16bn), up 7%.

Amazon Web Services (AWS) sales also grew 37% year-on-year from $13.5bn (£10.75bn) to $18.44bn (£14.69bn).

Physical stores sales increased 17% from $4.68bn (£3.73bn) to $4.59bn (£3.65bn), however online stores saw a 3% decline in sales from $51.12bn (£40.73bn) to $66.07bn (£52.63bn).

Amazon said its financial guidance is subject to “substantial” uncertainty as its results may be materially affected by Covid, fluctuations in foreign exchange rates, changes in global economic conditions and customer demand and spending, inflation, labour market and global supply chain constraints, world events,and the growth of online services.

Andy Jassy, Amazon CEO, said: “The pandemic and subsequent war in Ukraine have brought unusual growth and challenges.

“AWS has been integral in helping companies weather the pandemic and move more of their workloads into the cloud. Our Consumer business has grown 23% annually over the past two years, with extraordinary growth in 2020 of 39% year-over-year that necessitated doubling the size of our fulfilment network that we’d built over Amazon’s first 25 years.

He added: “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.”