A day after announcing it would conduct steep layoffs, Shopify Inc. announced a quarterly loss and issued more cautious commentary about the way inflation was impacting the business.
Despite falling premarket after the results were released, Shopify shares were in the black for virtually all of Wednesday's trading session. After declining 14.5% on Tuesday, shares were up about 11% on Wednesday.
The newoutlook supersedes all prior statements made byshopify After the first quarter, the outlook section led with expectations for year-over-year revenue growth that was lowest in the first half of 2022, and highest in the fourth quarter.
Given the pressures on consumer spending and negative impacts from currency, the executives said they expected gross merchandise volume and revenue to be more distributed over the course of the year.
e-commerce has largely reset to the pre-COVID trend line and is now pressured by high inflation, which we now expect will happen in 2022.
The adjusted operating loss for the second half of the year is expected to be more than what was seen in the second quarter due to time needed for the streamlining of our operations.
In conjunction with its previous earnings report, executives said that they would invest all of their gross-profit dollars into the business. In the previous earnings release, it appeared, but it wasn't in the current one.
As the industry faces a number of macroeconomic challenges, we believe our broader e-commerce coverage will likely share similar outlooks for 2H:22. He is more partial to shares of Amazon.com as he believes that the company will continue to capture retail market share as conditions improve.
Mark Mahaney of Evercore ISI said that online retail should continue to do well despite themacro headwinds. shopify should be involved in that
In the most recent quarter, the company posted a comprehensive loss of $1.21 billion, or 95 cents a share, compared to comprehensive income of $886 million, or 69 cents a share, in the year-ago quarter. The company had posted 22 cents in earnings a year before on an adjusted basis. The analysts were expecting less than 2 cents.
The revenue increased to $1.30 billion from $1.12 billion but came in just below the FactSet consensus.
Analysts had been looking for $48.6 billion.
Chief Financial Officer Amy Shapero said that while commerce through offline channels grew faster in Q2, where our exposure is lower but growing, we continued to see increased adoption of our solutions.
In a post about the plan to cut 10% of the workforce, Shopify Chief Executive Tobi Ltke said that the company had tried to expand to match expectations that the pandemic would permanently accelerate the mix of e- commerce spending.
A CFRA analyst flagged at the time ofshopify's last earnings report that he was unsure whethershopify's approach to profit reinvestment would sit well in the current market climate.
All Rights Reserved © 2024
