(Bloomberg) — Shopify Inc. slumped in premarket trading after the company kicked off earnings season for e-commerce firms with a result that missed analysts’ estimates.
It also said the outlook is getting worse.
The stock fell 7% to $29.34 as of 7:38 a.m. in New York. Shopify said in a statement it now expects 2022 to be “more of a transition year, in which e-commerce has largely reset to the pre-Covid trend line and is now pressured by persistent high inflation.”
The Ottawa-based company posted a loss of 3 cents per share on an adjusted basis in the second quarter, falling short of estimates for a profit of 3 cents, according to data compiled by Bloomberg.
Revenue rose 16% to $1.3 billion from a year earlier, broadly in line with expectations of $1.33 billion.
The worse-than-expected results came one day after Shopify said it was cutting its workforce by 10% amid a softening in online sales — amounting to roughly 1,000 jobs.
The shares dropped 14% Tuesday as Chief Executive Officer Tobi Lutke acknowledged that the company’s rapid expansion during the pandemic was unsustainable.
Shopify has plunged 77% this year as of Tuesday’s close.
Gross merchandise volume — the value of merchant sales flowing through Shopify’s platform — grew 11% to $46.9 billion during the quarter, missing estimates of $48.6 billion.
The shift out of pandemic lockdowns, elevated inflation and the threat of a recession have shifted consumer habits.
Retail stocks fell earlier this week after Walmart Inc. made a surprise cut to its profit outlook as surging prices cause consumers to spurn bigger-ticket purchases.
Amazon.com Inc. is set to release results on Thursday, with other e-commerce stocks including Wayfair Inc., Ebay Inc.
and Etsy Inc. reporting this week and next.
(Updates with details on outlook in fifth graph.)
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