Flat e-commerce is mitigated by Amazon cloud and ad units.
Amazon’s core e-commerce company may be faltering, but other profit-generating segments are performing admirably.
According to the corporation, online sales were flat in the first three months of the year compared to the same period in 2022.
However, this was offset by higher-than-expected sales in its cloud services and advertising segments.
Profits increased as well, indicating that the company’s cost-cutting initiative is beginning to bear fruit.
“There’s a lot to like about how our teams are delivering for customers, especially in this uncertain economy,” said CEO Andy Jassy.
Amazon sales have been slow as consumers return to in-store buying following the pandemic and tighten their budgets in response to rising living costs.
Concerns about the economy’s trajectory have also affected on its company, as companies become more hesitant about spending.
Mr Jassy has been pressing the company to improve its performance since taking over last year, shutting down several programs, such as its Halo fitness division earlier this week, delaying real estate development ambitions, restructuring its delivery network in the United States, and announcing thousands of job losses.
Since March of last year, the firm’s staff has dropped by 10%, with more than 75,000 people laid off since the end of previous year.
According to Insider Intelligence lead analyst Andrew Lipsman, this may be beginning to pay off.
“For the first time in several quarters, Amazon may finally have a bit of wind at its back,” said Mr Lipsman.
Revenue at Amazon’s advertising unit increased 23% year on year, while revenues at Amazon Web Services, the company’s long-term profit engine, increased 16%.
Overall sales increased by 9% to $127.4 billion in January-March, equivalent to increases at the end of last year, and a significant decrease from the pandemic, when sales increased by more than 40% in several quarters.