Amazon’s profit streak comes to an end
Seattle-based Amazon.com has ended its record profit growth streak with its second quarter financial report.
The company announced a profit of $2.6 billion for the three months ending June 30, compared to $2.5 billion during the same period in 2018. Although this demonstrates a slight profit, the company’s $2.6 billion is well below its record of $3.6 billion set in the first three months of this year. Amazon had posted its best-ever profit the previous four quarters.
According to CNN Business, the company’s significantly lower profit number comes as a result of Amazon heavily investing in its expedited delivery services. The company previously announced that it would spend $800 million during the second quarter to make free one-day shipping standard for its Prime customers, effectively halving the usual shipping window.
“Customers are responding to Prime’s move to one-day delivery — we’ve received a lot of positive feedback and seen accelerating sales growth,” said Jeff Bezos, Amazon founder and CEO. “Free one-day delivery is now available to Prime members on more than ten million items, and we’re just getting started. A big thank you to the team for continuing to make life easier for customers.”
Despite its lower than expected profit, the company also revealed a net sales increase of 20% to $63.4 billion in the second quarter, compared with $52.9 billion in the second quarter of 2018. The company’s EPS rose to $5.22 per share, compared to last years’ $5.07.