Amazon makes $10,000 per second as shoppers shelter in place
Amazon recorded sales of $75.4 billion in the first three months of the year, a first-quarter record for the ecommerce giant, as many consumers stepped up their online purchases during coronavirus-fueled lockdowns.
That translates into nearly $10,000 in sales every second, according to calculations from Christopher Rossbach, portfolio manager of the J. Stern & Co. World Stars Global Equity fund.
"The numbers are frankly staggering," Rossbach said in a note.
Amazon's North America sales rose 29%, while AWS — the company's huge cloud-computing segment — increased 33%, the company said in an earnings release Thursday. At the same time, its costs of fulfilling all those customer orders jumped 34% as it hired thousands of new workers and increased pay. Amazon posted an operating profit of $3.9 billion for the quarter, a nearly 10% drop from this period last year.
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," Amazon CEO Jeff Bezos said in a statement.
Bezos said the company would spend at least $4 billion on costs related to the COVID-19 outbreak in the coming three months, outlining an increase in personal protective equipment and pay bumps for workers, more intense cleaning of warehouses, and about $300 million to develop internal coronavirus testing capabilities.
Some Amazon workers say those measures aren't sufficient. Amazon and Whole Foods workers have called for a strike on Friday, asking for better paid leave policies, more protective equipment and a reinstatement of workers who have been fired after speaking out.
Amazon's financial success stands in stark contrast with the many brick-and-mortar stores that have been forced to shut their doors during the pandemic.
Despite Amazon's higher costs, the pandemic could very well work out in the company's favor if it uses the opportunity to integrate itself even more deeply into the lives of customers both old and new.
"The crisis will hopefully be short-lived, but the impact on Amazon could be profound over the long term, with over 150 [million] Prime members now active. Habits will form, and many of these people will shop more using Amazon in the future," Rossbach said.