Amazon CFO Brian Olsavsky Says Road To Pre-COVID Margin Levels Longer 'Than Bouncing Back In 1 Or 2 Quarters'

Amazon.com, Inc. AMZN CFO Brian Olsavsky said during the first-quarter earnings conference call the company is working hard and making progress at improving operating margins to pre-pandemic levels but noted: “It's a longer road than bouncing back in one or two quarters.”

Olsavsky cited the instance of operating margin in the North American segment being lower than the pre-pandemic times and explained how a lot of other factors also come into play.

"So, it's a bit of a marker on how much upside. But there are a lot of moving parts in that number. Obviously, there's the advertising, there are investments going on for future growth, and there's the core profitable and cost structure that our operations are achieving," he said, according to a transcript of the earnings call published on Seeking Alpha.

Also Read: Everything You Need To Know About Amazon Stock

Amazon, on Thursday, reported a 9% jump in its first-quarter revenue at $127.4 billion.

The company reported operating margins as a percentage of worldwide net sales at 3.7%. In pre-pandemic times, during the first quarter of 2020 for instance, the figure stood at 5.3%.

Additional Upside: CEO Andy Jassy said he remains optimistic that the company has a chance not just to recover the operating margins to where it was in pre-pandemic times but said there's an additional upside with some of the opportunities they have identified.

Talking about the international segment, Jassy pointed out the negative margin has come down and said the economy is starting to stabilize, especially in established countries of Europe.

"Top line is helping there but it's also a function of some of the reductions that we're making across some of our investments. Most of those are in North America, but that you'll see kind of the improvement in operational efficiency and on the edge of some of the global programs are going to be reducing cost in international," he explained.

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