Amazon’s stock is down again today, after the online retail giant reported its biggest profit miss in years.
Amazon posted a 25 percent increase in net sales for the second quarter, to $38 billion, but profits plunged to $197 million, or 40 cents a share, down from $857 million in the same quarter last year, and significantly below Wall Street’s expectations for its bottom line.
Amazon has traditionally favored investing money back into its various businesses over profits. On a call with reporters Thursday, Amazon CFO Brian Olsavsky noted that Amazon was “stepping up” investment right now. He also delved into what Amazon looks for when it invests in a new area.
“I would say we have been very transparent that we are continuing to invest in businesses that have four great characteristics,” Olsavsky said on the call. “Customers love them, they can grow to be large, they have strong financial returns and they are durable and can last for decades. That is in essence our investment philosophy.”
Olsavsky went on to note that there are a lot of great ideas that never see the light of day due to internal competition. Additionally, Amazon has shown willingness to pull the plug or pivot when something isn’t working.
“I will also say there is a lot of healthy competition within Amazon for resources and funding, so a lot of the best ideas are the ones that rise to the top,” he said.
Amazon’s diversifying portfolio has been on display through some of its recent moves. Amazon recently opened its first brick-and-mortar grocery stores, a pair of AmazonFresh Pickup locations in Seattle. The company also just expanded its PrimeNow two-hour delivery service to Singapore. On the hardware front, Amazon has announced and released several new Alexa-powered devices in recent months.
And that doesn’t even get to the $13.7 billion deal to buy Whole Foods Market, drastically expanding Amazon’s grocery reach. That wasn’t included in discussions because the deal has not closed yet.
Last year around this time, Olsavsky said, Amazon also stepped up its spending, investing heavily in video content and expanding its distribution center network. Those investments remain ongoing, as do its efforts internationally.
Amazon is also in the middle of a hiring blitz, and it’s global headcount is now up to 382,400. It brought in more than 31,000 new employees last quarter and has hired 113,500 people in the last 12 months worldwide.
The Seattle tech giant announced earlier this week that it plans to hire another 50,000 people to work in its fulfillment centers., with 80 percent of the openings for full-time roles. Amazon will also host its first-ever “Amazon Jobs Day” on Aug. 2 at 10 of its fulfillment centers where interested folks can learn more about the job opportunities.
The company said in January that it planned to add another 100,000 full-time jobs in the U.S. by mid-2018. The growth would push Amazon’s U.S. workforce to more than 280,000 people.