As much as Amazon wanted to put the spotlight in President Trump's trade war, it was inevitable for America's biggest online retailer.
First, the e-commerce company was caught up in a fleeting spat on Tuesday, with the White House intertwined with false reports that Amazon showed shoppers the cost of customs.
Two days later, economic reality arrived when Amazon reported in the slowest growth ever in North American retail.
Amazon's biggest region contributed to first quarter financial results, which showed slow overall overall sales growth since the depths of the pandemic, the company reported Thursday. Sales from January to March increased to $155.7 billion, up 9% from the same period last year. Profit increased 64% to $17.1 billion.
For this quarter, ending in June, Amazon has directed its investors to expect revenues of between $159 billion and $164 billion, with operating profit expected to shrink to $13 billion. Amazon has added “tariffs and trade policies” to its list of factors that it says could make forecasts uncertain.
The results were mixed compared to Wall Street expectations. Amazon's stock fell more than 3% in aftermarket trading after earnings was released.
“Obviously none of us know exactly where tariffs will settle, or when and where they will settle,” Amazon CEO Andy Jassy said in a call with investors. He said the company is “a rather maniac-focused” on lowering prices by purchasing additional stock prior to tariffs, and would help sellers in the Amazon market do the same.
Investors are trying to unlock how unsurprising tariffs that are not covered by President Trump will affect Amazon customers. Some speculated that consumers could have accelerated their purchases in March and April, kicking more tariffs, and boosting spending in otherwise uncertain environments.
Jassy said that Amazon customers have made “advanced purchases” of certain types of products, but did not specify which products.
Many different components drive Amazon retail revenue. Online sales of products directly to customers have increased by 5% to $57.4 billion, while services provided to sellers listings on the site have increased by 6% to $36.5 billion.
Advertising, which investors consider to be a promising and profitable business, has increased 18% to $13.9 billion.
Investors have long focused on Amazon's cloud computing business, generating most of the company's profits. Jassy, who ran the cloud business before his promotion to CEO, is building the company's artificial intelligence offering. The cloud business rose 17% in the first quarter to $29.3 billion.
Jassy said that if Amazon had more capacity in its data centers, it could have sold more cloud services. He added that this is a remote building filled with modern internet and AI-powered computers that will make the constraint easier in the coming months. The company is competing to build more infrastructure, and a release on Thursday showed that Amazon spent more than $24 billion in the first three months of the year, about $2 billion less than last quarter. In February, Amazon said it plans to spend around $100 billion on capital expenditures in 2025.
