During COVID-19, Amazon Unsure When Prime 1-Day Delivery Will Resume

COVID-19 allowed no preparation for “spikes in demand,” said Amazon Chief Financial Officer Brian Olsavsky on a Thursday Q1 call. The stock closed down Friday 7.6% at $2,286.04. Customer demand remains high but “at a cost” -- for essential items with lower average selling prices, he said. It’s “up in the air” when Amazon will resume one-day delivery service for Prime members, Olsavsky said, saying it could be Q2, Q3, “or beyond.” The challenge is in speeding up warehouse operations. Q1 revenue increased 26% to $75.5 billion. Amazon shoppers focused on health and personal care, groceries and home office supplies, Olsavsky said. Wireless products were among the discretionary categories with lower demand. The platform spent more than $600 million in COVID-19-related costs in Q1 and expects to top $4 billion in Q2. Costs included outfitting and cleaning facilities for social distancing, onboarding 175,000 new employees, buying personal protective equipment for employees, paying hourly workers higher wages, and investing “hundreds of millions" of dollars to develop COVID-19 testing capabilities, said the executive. It built in another $400 million for increased reserves for “doubtful accounts.” The company’s investment in COVID-19 testing in Q2 will be about $300 million -- “if we’re successful,” the CFO said.