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 <a href="https://www.thenationalnews.com/business/2022/02/04/amazon-shares-surge-17-in-after-hours-trading-as-it-raises-us-prime-fees/" target="_blank">raised the price of its Prime speedy-shipping programme by $20 to $139</a> 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 <a href="https://www.thenationalnews.com/business/economy/2021/09/15/amazon-increases-average-us-starting-pay-to-18-and-plans-to-add-125000-jobs/" target="_blank">offered higher pay</a> to attract workers during a labour shortage and even then could not fully staff warehouses. A warehouse in New York City <a href="https://www.thenationalnews.com/world/us-news/2022/04/01/amazon-workers-in-new-york-warehouse-vote-to-form-a-union/" target="_blank">voted to create Amazon's first US union</a>, <a href="https://www.thenationalnews.com/business/2022/04/09/amazon-demands-election-re-run-after-workers-vote-for-union-representation/" target="_blank">a result the retailer is contesting</a>. 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.
