Amazon hit by slowest growth in two decades Business

Amazon experienced its slowest growth in two decades, dropping its value by $150bn (£120bn) on Thursday as the pandemic internet shopping boom came to a halt.

The online retail giant said its revenue rose 7% in the first three months of the year to $116.4 billion. This is the slowest growth since 2001, in the aftermath of the dotcom bubble.

He also revealed his first loss since 2015 as costs soared and he hit his investment in electric car maker Rivian hard.

Shares fell nearly 10% in after-hours trading as the company issued a disappointing outlook for the next quarter. He said sales could rise by as little as 3%, well below Wall Street forecasts.

Amazon is grappling with rising fuel and shipping costs, as well as rising wages and supply constraints due to shutdowns in China. He warned investors to expect lower earnings as he grapples with costs.

The figures come amid questions about the sustainability of the online shopping boom as economies continue to reopen.

Internet sales accounted for 26.1% of all UK retail spending in March. It was the lowest level since March 2020 when the first coronavirus lockdown was introduced and down from a peak of 37.8% in January 2021.

Sales were boosted by the growth of AWS, Amazon’s cloud computing division, as well as rising advertising revenue. Its core online retail business, which accounts for nearly half of revenue, suffered a 3% decline.

The company posted a loss of $3.8 billion, compared with a profit of $8.1 billion a year ago. It took a $7.6 billion writedown on Rivian, whose shares have fallen since the electric carmaker’s U.S. IPO in November.

Amazon’s slowing growth poses a challenge for Andy Jassy, ​​the company’s chief executive, who took over from founder Jeff Bezos last summer.

Mr Bezos, the second richest person in the world, had run Amazon since the company was founded in 1994 and remains in place as executive chairman.

Mr Jassy said: “The pandemic and subsequent war in Ukraine has brought about unusual growth and challenges.” He said the company would look to cut costs “as we work through inflationary and supply chain pressures.”

Amazon suspended all shipments to Russia and Belarus in March and said it would no longer accept new merchants from countries seeking to sell goods to customers.

The company had no major operations in the countries, but customers could order items in Russia from foreign versions of the website.

Separately, Apple reported its slowest quarterly growth in nearly two years, although the company surprised investors with better-than-expected numbers.

The Silicon Valley giant posted revenue of $97.3 billion, an increase of 9%, and said profits rose 6% to $25 billion.

Although this is its third largest quarter in terms of sales, it is the weakest growth the company has seen since the fall of 2020, when supply chain blockages in the event of a pandemic have delayed the release of its new iPhones.

Apple was recently hit by Covid lockdowns in China, which halted production at factories in Shenzhen and other cities.

Shares rose about 2% in after-hours trading as the company increased its dividend and announced it would return $90 billion to shareholders through share buybacks.