Online grocery sales tripled from year-earlier levels

SEATTLE – Amazon on Thursday reported a profit of $5.2 billion in the second quarter as net sales soared 40% year on year to $88.9 billion.

Amazon’s stellar results were announced on the same day the government reported that the U.S. economy, as measured by gross domestic product, fell 9.5% in the second quarter, as both consumer spending and business investment crumbled.

“This was another highly unusual quarter and I couldn’t be more proud of and grateful to our employees around the globe,” CEO Jeff Bezos said in an earnings statement.

Bezos added, “As expected, we spent over $4 billion on incremental COVID-19-related costs in the quarter to help keep employees safe and deliver products to customers in this time of high demand — purchasing personal protective equipment, increasing cleaning of our facilities, following new safety process paths, adding new backup family care benefits and paying a special thank-you bonus of over $500 million to frontline employees and delivery partners.”

Amazon said revenue in its North America segment rose 43% to $55.4 billion in the quarter ending June 30. The international segment contributed revenue of $22.6 billion, a year-on-year increase of 38%.

Revenue in its cloud division – Amazon Web Services – increased 29% from a year earlier, down from 33% growth in the first quarter and the first time that the unit’s quarterly growth came in below 30%.

Capital expenses and finance leases increased 65% in the quarter to $9.4 billion as Amazon continues building out its fulfillment capabilities, Brian Olsavsky, Amazon’s chief financial officer, said during the company’s earnings call with investors.

Amazon said it has created 175,000 new jobs since March and is converting 125,000 of those roles into regular, full-time positions. Amazon’s employee count reached 876,800 as of the end of the second quarter, a total that does not include seasonal and contract workers.

The hiring surge helped Amazon respond to pandemic-related shifts in the retail landscape. Consumers bought more from Amazon after many retailers closed their physical stores or reduced in-store capacity to in accordance with social distancing guidelines.

Amazon said online grocery sales tripled from year-earlier levels in the second quarter. The company said it increased grocery delivery capacity by more than 160% and tripled grocery pickup locations during the period.

Although online grocery sales are not itemized in its quarterly financial statement, Amazon said Whole Food sales across all channels – in-store, delivery and pickup – increased in the second quarter. Quarterly sales in its physical store category, which is dominated by Whole Foods, declined 13% to $3.8 billion.