Shares of Amazon sank as much as 12% in after-hours trading on Thursday after the company reported its slowest sales growth in almost two decades.
The company saw its pandemic momentum fade in the first quarter, with sales rising just 6.8% to $116.44 billion, from $108.52 billion a year ago. Management added that it expects second-quarter revenue of between $116 billion and $121 billion, compared to analysts’ estimates for $125.5 billion.
Amazon also revealed a net loss of $3.8 billion in the first quarter, or $7.56 per diluted share, compared to a net gain of $8.1 billion, or $15.79 per diluted share, in the same period a year ago.
The loss was largely a result of a $7.6 billion hit from the company’s Rivian investment in the quarter, after shares in the electric vehicle company dropped sharply through March.
Amazon, like Google and Facebook earlier in the week, argued much of its losses were a result of the global economic slowdown related to the Ukraine war and rising inflation.
“The pandemic and subsequent war in Ukraine have brought unusual growth and challenges,” Andy Jassy, Amazon’s CEO, said in the earnings release, adding that his company is working through ongoing inflationary and supply chain pressures.
Jassy noted that Amazon is also “no longer chasing physical or staffing capacity” in its fulfillment network and is instead working to improve productivity and cost efficiencies moving forward.
“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 CEO said.
