Not even Amazon is immune from the impact of the coronavirus.
Founder/CEO Jeff Bezos devoted much of the e-commerce behemoth’s first-quarter (ended March 31) press release to highlight efforts the company has taken on the warfront against COVID-19 — including safeguarding its warehouse employees, hiring 175,000 more of them, increasing hourly wages by $2, working on virus detection test production, deploying AWS to school districts for at-home learning, and reserving special shopping times for seniors at Whole Foods, among other initiatives.
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“The current crisis is demonstrating the adaptability and durability of Amazon’s business as never before, but it’s also the hardest time we’ve ever faced,” Bezos said in a statement.
Indeed, while net sales increased 26% to $75.5 billion in the quarter, from $59.7 billion in previous-year period, profit declined 31% to $2.5 billion, from $3.6 billion.
The culprit: a shutdown of all non-essential shipments, including many third-party sellers (more than 50% of Amazon sales), and increased delivery-related costs. In addition, there was a $387 million unfavorable impact from year-over-year changes in foreign exchange rates, which impacted net sales by 1%.
Amazon said it spent $600 million on COVID-19-related costs, which is expected to increase to $4 billion in the current second quarter.
On the entertainment front, Prime Video launched Prime Video Cinema in the U.S., the U.K., and Germany — a premium VOD movie rental service that enabled members to stream in-theater movies at home, including titles such as Birds of Prey, Emma, The Invisible Man, Onward and Trolls World Tour.
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Prime Video premiered several new Amazon Original series, including the reality competition, “Making the Cut,” hosted and executive produced by Heidi Klum and Tim Gunn; “The Forgotten Army” in India; “Love Island” in France; “Celebrity Hunted” in Italy; and the docuseries “The Test: A New Era for Australia’s Team” in Australia.
As previously reported, Prime Video and the NFL announced a multiyear agreement to live-stream 11 Thursday Night Football games as well as one additional regular season game.
Online store sales increased 24% to $36.6 billion, from $29.4 billion a year ago. Store sales include packaged media such as DVD, Blu-ray Disc and music CDs. Subscription serviced revenue, which includes Prime memberships, audiobooks, transactional VOD, digital music, e-books and other non-AWS subscription services, increased 28% to $5.5 billion, from $4.3 billion a year ago.