Growth in advertising and cloud services offset Amazon's flat online sales

Amazon reported no growth in its online retail business for the first quarter of 2023, but this was offset by better than expected sales in its cloud services which grew 16% and advertising units, up 23%.  

Net sales were up 9% to $127.4bn (£102bn) in the three months to 31st March 2023, compared to $116.4bn (£93bn) in the first quarter 2022 while operating income increased to $4.8bn (£3.8bn), compared to $3.7bn (£3bn) in first quarter of 2022. Amazon revealed that this includes approximately $0.5bn (£0.4bn) of charges related to estimated severance costs. 

The firm has responded to the post-pandemic environment by cancelling some warehouse expansion plans and cutting jobs. 

Andy Jassy, Amazon c.e.o., said: “There’s a lot to like about how our teams are delivering for customers, particularly amid an uncertain economy. Our stores business is continuing to improve the cost to serve in our fulfillment network while increasing the speed with which we get products into the hands of customers (we expect to have our fastest Prime delivery speeds ever in 2023).” 

He said the advertising business “continues to deliver robust growth, largely due to our ongoing machine learning investments” and said the company “like[s] the fundamentals” it is seeing in its cloud platform Amazon Web Services adding “there’s much growth ahead”.