As the Covid boost fades, Amazon expects slower sales growth.

As the impact of the Covid epidemic fades, Amazon expects sales growth to decline in the third quarter.

During the Covid issue, customers turned to Amazon and other online platforms, resulting in record earnings for the US behemoth.

However, Amazon's rapid expansion is slowing as customers return to brick-and-mortar stores.

In the second quarter, revenue increased by 27% to $113 billion (£81 billion), but this fell short of experts' estimates.

In after-hours trading, Amazon's stock dropped more than 7%.

Earlier in the Covid outbreak, Amazon reported record revenues, signed up more than 200 million people for its Prime membership, and hired more than 500,000 people to meet up with demand.

However, as vaccines become more widely available and limitations are eased, some consumers are flocking to stores and adopting click-and-collect services to compete with Amazon and its competitors' lightning-fast delivery of online shopping.

Amazon's net revenue increased to $113.08 billion in the second quarter ended June 30 from $88.91 billion a year earlier. Analysts had predicted $115.20 billion on average.

Prime Day, the world's largest online retailer's annual marketing fiesta, was pushed to June this year in the hopes of selling more things before buyers went on vacation.

Analysts have noticed indicators of demand weakening in the second quarter.

North America, Amazon's largest market, witnessed a 22 per cent gain in sales in the second quarter, compared to 43 per cent a year ago.

However, profit increased by 48 per cent to $7.8 billion, making it Amazon's second-largest quarterly result ever.

Bezos makes a move

On July 5, Amazon's founder, Jeff Bezos, stood down as CEO and became executive chair of the company's board of directors.

Andy Jassy was named to the position after formerly leading Amazon's cloud computing branch, Amazon Web Services (AWS).

AWS was a bright spot in the second quarter, with revenue increasing by 37% to $14.8 billion.

"Over the last 18 months, our consumer business has been called on to deliver an unprecedented number of items, including PPE [personal protective equipment], food, and other products that have helped communities all over the world cope with the difficult circumstances of the pandemic," Mr Jassy said.

"At the same time, AWS has assisted many organisations and governments in maintaining business continuity, and we've seen AWS growth reaccelerate as more enterprises bring forward plans to transform their businesses and migrate to the cloud."

This week's findings from Big Tech include Amazon's. As the Covid epidemic continues, Apple, Microsoft, and Alphabet, the parent company of Google, have all announced record profits. Facebook, on the other hand, has stated that revenue growth will decrease.

"It says something when you deliver quarterly sales approximately equal to Ukraine's annual GDP and 33 percent operating profit growth and yet disappoint the market," Nicholas Hyett, equities analyst at Hargreaves Lansdown, said.

"It's easy to see why Jeff Bezos would want to fly into space.

"In all seriousness, Amazon is gradually running into the law of huge numbers, notably in retail in the United States.

"When you just sell $1,000 of product each year, increasing sales by 40% is simple. Finding an extra $160 billion in sales when your annualised sales are $400 billion is difficult."

According to Mr. Hyett, this means Amazon will have to invest a lot of money to achieve future development.

"The group has plenty of irons in the fire for the future," he added. "All it has to do now is hope one of them comes off big."

Mr. Jassy inherited a job that has never been bigger or more complicated.

Last quarter, Amazon, the world's largest online retailer, announced a plan to buy MGM Studios for $8.5 billion, allowing it to expand in Hollywood while also operating a grocery chain, developing a healthcare business, and facing regulatory scrutiny from around the world.

Costs are also on the rise. To attract 75,000 workers during a labour shortage, the corporation offered an average hourly compensation of $17, more than double the US minimum wage, plus signing bonuses.