Amazon projected sluggish second-quarter sales growth, reporting its first quarterly loss in seven years, as the largest online retailer struggles to build off the major gains it made early in the pandemic.
Shares plunged about 10 per cent in extended trading.
Revenue will be $116 billion to $121bn in the period ending in June, Amazon said on Thursday in a statement. Analysts, on average, estimated $125bn, data compiled by Bloomberg show.
The company has been grappling with rising energy and labour costs as well as changing shopping habits as people return to pre-pandemic activities.
Amazon began rolling out a 5 per cent fee charged to independent sellers on its website who use its shipping services, a move designed to blunt the impact of inflation and rising fuel costs.
Earlier this year, Amazon raised the price of its Prime speedy-shipping programme by $20 to $139 a year in the US. Growth in Amazon’s main e-commerce business, which had been supercharged by the pandemic, has fizzled.
Looking for labour, it offered higher pay to attract workers during a labour shortage and even then could not fully staff warehouses. A warehouse in New York City voted to create Amazon's first US union, a result the retailer is contesting.
Despite those pressures, Wall Street analysts have been nearly unanimous in their optimism about Amazon’s prospects, citing the company’s huge investments in package handling and delivery capacity as well as continued growth in its highly profitable cloud-computing and advertising businesses.
“The pandemic and subsequent war in Ukraine have brought unusual growth and challenges,” chief executive Andy Jassy said in the statement.
“As we’re no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfilment network.
“We know how to do this and have done it before. This may take some time, particularly as we work through ongoing inflationary and supply chain pressures.”
Amazon said in March it planned to close all 68 of its bookstores, pop-ups and other home goods shops, as it focuses on grocery stores. It recently automated two Whole Foods Market locations to make them cashier-less. The company's physical store sales grew 17 per cent to $4.6bn.
Sales gained 7.3 per cent to $116.4bn, meeting analysts’ estimates. That’s the slowest pace of growth since 2001 and marks the first time Amazon has ever recorded back-to-back quarters of less than 10 per cent revenue growth.
The company also reported a net loss of $3.8bn, compared with profit of $8.1bn in the same period a year ago. Amazon said it included a loss of $7.6bn in non-operating expense from its investment in Rivian Automotive.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Timeline
2012-2015
The company offers payments/bribes to win key contracts in the Middle East
May 2017
The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts
September 2021
Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act
October 2021
Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence
December 2024
Petrofac enters into comprehensive restructuring to strengthen the financial position of the group
May 2025
The High Court of England and Wales approves the company’s restructuring plan
July 2025
The Court of Appeal issues a judgment challenging parts of the restructuring plan
August 2025
Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision
October 2025
Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange
November 2025
180 Petrofac employees laid off in the UAE
