Amazon plows ahead with spending despite profit plunge

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Amazon has reported a 25% rise in second-quarter operating revenues, to $38bn, although it also saw a 77% fall in overall income. It warned it could lose up to $400m in operating profit during the current quarter. Operating expenses rose 28.2% to $37.33bn, with costs rising for fulfillment, marketing and technology.

CFO Brian Olsavsky said in an earnings call that Amazon was “going to have about 80% of our increase in square footage for fulfillment and shipping coming online in the back end of the year, so that’s a major increase”.

He would not be drawn on the plans for Whole Foods, the bricks-and-mortar grocery business bought recently, but he did admit that company was experimenting with physical retailing.

“We are experimenting with different formats; and we look at different sizes, and we look at revenue cost per square foot just like any other physical retailer. So, we haven’t essentially nailed the model yet, and we continue to experiment to see what works and how it differs by city or more suburban locations.”

Reuters has the full story.