Earnings and revenue gains beat Wall Street forecasts

SEATTLE — Amazon, a leading beneficiary of the surge in online shopping during the pandemic, on Thursday reported double-digit sales and earnings gains for the first quarter.

Net sales increased 44% to $108.5 billion in the three months ended March 31, compared with $75.5 billion in the comparable period in 2020. The increase was 41% when the favorable impact from changes in foreign exchange rates are excluded.

Operating income increased to $8.9 billion in the quarter, up from $4.0 billion in last year’s first quarter. Net income increased to $8.1 billion in the first quarter, or $15.79 per diluted share, compared with net income of $2.5 billion, or $5.01 per diluted share, in the first quarter of 2020.

Looking ahead, Amazon expects further strong growth in the second quarter. Net sales are expected to be between $110.0 billion and $116.0 billion, which would represent growth of between 24% and 30% compared with the prior year period. (That guidance assumes a favorable impact of about 200 basis points from foreign exchange rates.) Operating income is expected to be between $4.5 billion and $8.0 billion, versus $5.8 billion in the second quarter of 2020. Amazon is expecting about $1.5 billion of costs related to COVID-19, and that its Prime Day sales event will occur in the second quarter.

In reporting its first-quarter results, Amazon listed some highlights of its retail business. They include:

• There are now more than 200 million paid Prime members worldwide. Members have exclusive access to deals every day and especially during Prime Day, which will take place later in the second quarter.
• Amazon continues to invest in fast, free, and convenient delivery for customers. In the U.S., same-day delivery in as few as five hours is free on orders over $35 on over three million items in select cities. This is in addition to free same-day delivery on millions of items in thousands of cities and towns across 47 major U.S. metro areas, plus over 10 million items available for free one-day delivery coast to coast.
• Amazon continues to expand Amazon Scout, a fully electric autonomous delivery system. Similar in size to a small cooler on wheels, Amazon Scout rolls down the sidewalk at a walking pace and delivers items right to customers. Since its launch, Scout has delivered tens of thousands of packages to customers in California, Georgia, Tennessee, and Washington, the company said, adding that the program is continuing to expand to new communities in the U.S.
• The new Prime prescription savings benefit offers pharmacy savings at more than 60,000 participating pharmacies in the U.S., including Amazon Pharmacy. Amazon says it has helped Prime members save millions of dollars on prescription medications so far this year when paying without insurance, both at Amazon Pharmacy and other local pharmacies.
• Amazon has expanded its Discover Rooms, an immersive shopping experience designed to help customers browse and shop from thousands of home room designs and instantly discover home furnishing product inspiration based on visual attributes. The experience is now available in nine countries, including Canada, France, Germany, India, Italy, Japan, Spain, UK, and the U.S.
• Prime Wardrobe, Amazon’s “try before you buy” offering, expanded selection and launched new innovations for customers, including the ability to chat live with Amazon Stylists for personalized recommendations and trial items recommended by their favorite fashion influencers and websites.

Amazon has also seen growth in its non-retail businesses. Amazon Web Services, the company’s cloud computing business, reported net sales of $13.5 billion during the quarter, a 32% increase over the prior-year period.