Amazon, the largest online retailer in the United States, found itself unable to avoid the effects of ongoing economic uncertainties and trade tensions.
Earlier this week, the company became involved in a brief dispute with the White House over inaccurate reports claiming Amazon would disclose tariff costs to customers.
Shortly after, Amazon revealed its North American retail segment experienced one of its slowest growth rates in recent history.
This key region contributed to first-quarter results that showed overall sales growth at its slowest pace since the peak of the pandemic. From January through March, sales increased 9 percent year-over-year, reaching $155.7 billion, while profits surged 64 percent to $17.1 billion.
For the second quarter ending in June, Amazon forecasted sales between $159 billion and $164 billion, with operating profits potentially declining to as low as $13 billion.
These mixed results fell short of some market expectations, causing Amazon’s stock to drop over 3 percent in after-hours trading following the earnings announcement.
Andy Jassy, Amazon’s chief executive, expressed satisfaction with the company’s start to 2025, emphasizing ongoing innovation and efforts to enhance customer experience.
Amid ongoing concerns about tariffs, some analysts suggested that consumers may have accelerated purchases in March and April ahead of potential tariff increases, temporarily boosting spending in an uncertain market.
Mr. Jassy noted in a recent interview that consumer buying has remained steady, with some categories seeing early purchasing ahead of tariffs.
Amazon’s retail revenue is driven by multiple components. Direct product sales to customers rose 5 percent to $57.4 billion, while services offered to third-party sellers grew 6 percent to $36.5 billion.
Advertising, a rapidly expanding and profitable division, increased 18 percent to $13.9 billion.
The company’s cloud computing segment, a major profit driver, grew 17 percent to $29.3 billion in the first quarter. Under Mr. Jassy’s leadership, the business has been expanding its artificial intelligence capabilities.
Amazon invested over $24 billion in capital expenditures during the first quarter, slightly less than the previous quarter’s spending.
In February, the CEO mentioned that the demand for cloud computing and AI services outpaces the company's current data center capacity, with plans to invest approximately $100 billion in capital expenditures throughout 2025.
