Amazon has spent nearly $1 billion in recent months to speed up package delivery.
In April Amazon said it expected to spend around $800 million in the second quarter improving warehouses and delivery infrastructure as part of a plan to make one-day shipping the standard for Prime members. Shorter delivery times will stop Amazon from losing market share to Walmart and Target that already have physical inventory near most customers.
Amazon needs to build out its inventory centers to better compete on delivery speed.
Amazon’s second-quarter earnings report will be released today after the closing bell. Analysts expect revenue of $62.5 billion, up 18.1% from the year-earlier period. That would be an improvement from 16.8% in the previous quarter which was Amazon’s slowest expansion in four years.
Amazon shares have climbed 33% this year versus the 20% gain for the S&P 500.
Amazon is facing regulatory scrutiny with antitrust officials in the U.S. and the EU. Many retailers and mall shops have been closed due to competition from Amazon. The probe into Amazon could cause the company to be less aggressive when it comes to acquisitions. It is a pretty good bet that the Federal Trade Commission is going to be scrutinizing any deals Amazon brings to the table.