Net sales increased 7%, to $116.4 billion, in the period
SEATTLE — Amazon.com Inc. recorded net sales of $116.4 billion in the first quarter of fiscal 2022, an increase of 7% versus the prior-year period. But that gain is the company’s smallest in years and compares to a 44% increase in last year’s first quarter. The company also had a net loss of $3.8 billion in the quarter, due in part to a $7.6 billion decline in the value of its investment in the electric vehicle firm Rivian Automotive Inc.
In addition to slowing sales growth, Amazon is also facing rising costs, and the company indicated that those problems will likely linger. Amazon’s guidance for the current quarter calls for net sales to grow between 3% and 7%. Operating income for the quarter is expected to range from a $1 billion loss to a $3 billion gain, compared with a positive operating income of $7.7 billion in the prior-year period.
Amazon CEO Andy Jassy called out the strength of the Amazon Web Services (AWS) business in his statement on first-quarter results, and he was upbeat about the company’s strategy going forward.
“The pandemic and subsequent war in Ukraine have brought unusual growth and challenges,” Jassy said. “With AWS growing 34% annually over the last two years, and 37% year-over-year in the first quarter, 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 fulfillment network that we’d built over Amazon’s first 25 years — and doing so in just 24 months. Today, as we’re no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfillment network.
“We know how to do this and have done it before. 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.”
The company also used its financial report to call out some of its achievements in the quarter. Some of the highlights of the company’s retail business include:
- Amazon announced Buy with Prime, a new benefit for Prime members in the U.S. that extends the convenience of shopping with Prime to online stores beyond Amazon.com. Prime members can shop directly from participating merchants’ online stores using their Prime member benefits, including fast and free delivery, a seamless checkout experience, and free returns on eligible orders.
- Style Feed was launched in the U.S. and in India to offer a shoppable stream of influencer-curated content on Amazon’s shopping app to help customers explore fashion, home décor, and beauty items.
- Amazon opened eight new Amazon Fresh grocery stores, giving it 46 of the outlets globally, and the company said that the newest one, located in Seattle, is the world’s first grocery store to seek Zero Carbon certification from the International Future Living Institute. It features more than a dozen store design upgrades that are expected to save nearly 185 tons of carbon emissions each year when compared to an industry-standard grocery store, according to the company.
- Amazon opened a new, larger Amazon Go store format for customers in suburban areas in the U.S., with the first location in Mill Creek, Washington. The new format features Amazon’s Just Walk Out technology for a checkout-free shopping experience, an expanded selection of grab-and-go food and beverage items, and a Made-to-Order kitchen with freshly prepared, customizable breakfast and lunch items. Amazon has plans to expand this format to the Los Angeles area in the coming months.
- The company also introduced its Just Walk Out technology at two Whole Foods Market stores, located in Washington, D.C., and Sherman Oaks, California. Just Walk Out technology also rolled out at a number of new third-party locations, including travel retailer WHSmith in LaGuardia Airport in New York City; UBS Arena in New York; and Minute Maid Park in Houston, Texas. In addition, a food and beverage store equipped with Just Walk Out technology and Amazon One will be opening soon at T-Mobile Park in Seattle, according to the company, which said the combination of technologies will give fans the option to enter the store with their palm or credit card, take what they want, and leave without stopping to check out.