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Amazon shares slide after sales disappoint

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Amazon entered the post-Jeff Bezos era on Thursday with a leap in profit and sales, despite an end to the coronavirus lockdowns that had turbocharged online shopping.

The online shopping giant said revenues had climbed by 27pc in the three months to the end of June to $113bn (£81bn), the third successive quarter revenues had surpassed $100bn. However, shares dropped by more than 7pc in after-hours trading, with the sales figures missing analysts’ expectations and towards the lower end of Amazon’s own guidance.

Profits climbed to $7.8bn, up 50pc on the same period a year ago, when worldwide shutdowns had sent consumers flocking to Amazon for essential goods.

It was the first set of results issued since its core markets in the West began to reopen, and seen as a crucial test of whether Amazon’s enormous expansion during lockdown would stick once customers could shop in person more freely.

It was also the first set of results under Amazon’s new chief executive Andy Jassy, 53, who previously ran its highly profitable cloud services division AWS and who took over from its founder Jeff Bezos earlier this month.

Among his first challenges will be an attempt by US regulators and legislators to break up the company or curb its empire, as well as a renewed campaign by American unions to organise its warehouse workers.

In his first public comments as chief executive, Mr Jassy pointed to the support that Amazon’s retail operation, as well as its giant cloud computing arm AWS, had provided in the pandemic.

“Over the past 18 months, our consumer business has been called on to deliver an unprecedented number of items, including PPE, food, and other products that helped communities around the world cope with the difficult circumstances of the pandemic,” he said.

“At the same time, AWS has helped so many businesses and governments maintain business continuity.”

Andy Jassy
Andy Jassy

Mr Bezos, the richest person on Earth, will continue as Amazon’s executive chairman focusing on long-term projects such as research to improve workplace safety and side hustles such as his rocket company Blue Origin, which briefly blasted him into space last week.

Following the flight, Mr Bezos said: “I want to thank every Amazon employee and every Amazon customer, because you guys paid for all this.”

Insiders say that Mr Jassy, who was reportedly once considered to be chief executive of Microsoft, is more measured and soft-spoken than his predecessor, famous for his savage criticism of lieutenants.

Amazon is expected to overtake US supermarket Walmart as the world’s biggest retailer by sales as soon as next year.

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