Shopify misses estimates and issues gloomy guidance
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In this photo illustration the logo of Canadian e-commerce company Shopify Inc. is displayed on a smartphone. In this photo illustration the logo of Canadian e-commerce company Shopify Inc. is displayed on a smartphone.
Thomas Trutschel | Getty Images
Shopify on Wednesday reported weaker-than-expected results for the second quarter, and warned that inflation and rising interest rates would weigh on the business in the second half of the year.
Here’s how the company did: Earnings: A loss of 3 cents per share, adjusted, vs. an expected gain of 2 cents per share as expected by analysts, according to Refinitiv.
Revenue: $1.3 billion, vs. $1.33 billion as expected by analysts, according to Refinitiv.
The stock closed up 11.7% on Wednesday as tech stocks rallied .
Shopify’s layoff announcement on Tuesday, and subsequent stock fall, appears to have “de-risked” its shares on Wednesday, said Tom Forte, an analyst at D.A. Davidson, who has a hold rating on the stock. Executives’ commentary around efforts to curb spending, while continuing to take market share in e-commerce, may have allayed some investors’ fears, Forte added.The Canadian company, which helps business owners set up a store online, was a Covid-19 pandemic darling. When the pandemic forced physical stores to temporarily shutter, many retailers turned to Shopify to establish a presence online. That propelled Shopify’s stock to new highs, and it saw double-digit revenue growth throughout much of 2020 and 2021.Investors are closely watching earnings results from retailers and e-commerce companies to see how elevated inflation and the threat of a recession are impacting consumer spending habits. The latest warning came earlier this week when Walmart slashed its profit forecast. Amazon is set to report second-quarter results on Thursday, and Etsy will report results on Wednesday after market close.On Wednesday, Shopify said it now expects […]
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