Amazon profit falls as pandemic-related costs rise

NEW YORK — Amazon’s sales soared in the first three months of the year, as more home-bound people shopped online amid the coronavirus pandemic.

But getting millions of packages to shopper’s doorsteps is expensive. The rising costs pushed Amazon’s first-quarter profit down 29% and its earnings missed Wall Street expectations. Amazon shares slipped about 5% in after-hours trading Thursday.

And CEO and founder Jeff Bezos says Amazon will spend more.

Bezos said he expects the company to spend $4 billion “and perhaps a bit more” in the second quarter on workers’ overtime, masks and to disinfect Amazon’s vast warehouses.

Still, the company is in better financial position than most traditional retailers. Macy’s, Kohl’s and Gap temporarily closed their stores, losing much of their sales. They have also stopped paying their workers.

Amazon has struggled to keep up with the surge in orders. Deliveries that took two days or less can now take a week or longer. And it is sold out of many the products people want, like toilet paper and disinfectant sprays.

The problem, Amazon said, is that it can’t get products into its warehouses and out again fast enough. The company doesn’t know when delivery times will return to normal.

“Right now, things are still so up in the air that I can’t really project when that day will be,” said Brian Olsavsky, Amazon’s chief financial officer.

from Boston Herald https://ift.tt/3f5BxFf