In the second quarter ended June 30, net sales at Amazon rose 7%, to $121.2 billion, and the net loss was $2 billion compared to net income of $7.8 billion in the same period a year earlier. The sales gain was well below the company's traditional gains in the 20% range, and the net loss marked the second quarter in a row Amazon has had a net loss. The first-quarter net loss was Amazon's first quarterly loss in seven years.
Despite the bad numbers, Amazon stock rose more than 10% in after-hours trading because results were better than analysts' forecasts and because Amazon predicts that third-quarter sales will grow 13%-17%, to $125 billion-$130 billion.
The company is consolidating much of its warehouse operations, which were greatly expanded after the pandemic started and consumers came to buy more and more online. But after lockdowns ended, more consumers are shopping in bricks-and-mortar stores again. For Amazon, that's meant major changes from its usual pattern of regular growth.
As the Wall Street Journal put it, "The company said that it had committed to too much warehouse space and had too many employees in its warehouses, which the company said would add $10 billion in costs through the second quarter. The company has worked to more aggressively sublease millions of square feet of excess warehouse space, defer construction of new facilities and find ways to end or renegotiate leases with outside warehouse owners while thinning out its hourly workforce through attrition."
The New York Times noted that "Amazon has closed, canceled or delayed openings for more than 35 warehouses across the country, according to MWPVL International, a consulting firm that closely tracks Amazon's operations."
At the same time, Amazon has been affected by consumer spending shifts as inflation rises and the costs of basic goods like food and fuel have increased. Amazon's online stores sales fell 4%, to $50.9 billion, in the quarter, the second quarter in a row that online stores sales have fallen.
Amazon's strongest businesses continue to be Amazon Web Services, its cloud-computing division, and advertising operations. The company's investment in Rivian Automotive, an electric car maker, resulted in "a pre-tax valuation loss of $3.9 billion included in non-operating expense."