Amazon has released its financial report from the first quarter of 2020, and as many retailers struggle amid the spread of COVID-19, many customers apparently have gravitated toward Amazon.
According to Amazon, the online retailer saw a $15.8 billion increase in net spending compared to the fourth quarter of 2019, marking a 26% increase in sales.
Despite the increase in sales, Amazon saw a decline in income, with the company drawing $2.5 billion in net income in the first quarter, compared to $3.6 billion of income in the fourth quarter of 2019.
The first quarter ended on March 31, meaning the first quarter came to a close just weeks after states began implementing stay-at-home orders. The full effect of Amazon’s jump in sales amid the spread of coronavirus isn’t fully known, but Amazon expects to maintain similar levels of sales.
The company projects $75.0 billion and $81.0 billion in net sales. The company also projects that its net income will decrease to a range minus $1.5 billion to a gain of $1.5 billion. This is due to Amazon spending nearly $4 billion in coronavirus-related costs.
“Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit,” Amazon CEO Jeff Bezos said. “But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe. This includes investments in personal protective equipment, enhanced cleaning of our facilities, less efficient process paths that better allow for effective social distancing, higher wages for hourly teams, and hundreds of millions to develop our own COVID-19 testing capabilities.
“There is a lot of uncertainty in the world right now, and the best investment we can make is in the safety and well-being of our hundreds of thousands of employees. I’m confident that our long-term oriented shareowners will understand and embrace our approach, and that in fact they would expect no less.”