Shares of Shopify Inc. fell the most in almost two years after weak forecasts for growth this year as online spending plummeted after the Bovid-19 boom and consumers faced higher inflation.
“The acceleration of e-commerce caused by Covid, which resulted in the first half of 2021 in the form of blockades and government incentives, will be absent from 2022,” the Canadian e-commerce giant said on Wednesday. “There is caution about inflation and consumer spending soon, all year long.”
As a result, Shopify said revenue growth for the full year will be lower than 57% growth in 2021. Shares traded in the US fell as much as 16% after the market opened in New York. This was the largest intraday decline since March 2020.
Shopify, which provides software and other services that underpin the websites of many small businesses, rose sharply in the early stages of the pandemic, and sales jumped 86% in 2020. However, investors fear that the company will not be able to sustain growth as buyers return to more conventional buying patterns. Those fears intensified last month when Shopify said yes stopped contracts with several partners in warehousing and execution, sending shares to a minimum of 16 months.
But in the fourth quarter Shopify surpassed analysts’ estimates of revenue and profit.
Revenue grew 41% to $ 1.38 billion. Analysts had forecast an average of $ 1.34 billion, according to data collected by Bloomberg. Earnings, excluding some items, were $ 1.36 per share, compared to analysts’ average estimates of $ 1.26. Gross goods, sales to resellers through the Shopify platform, rose 32% in the fourth quarter from $ 54.1 billion a year earlier. Analysts estimated an average of $ 52.6 billion.
The company’s successful fourth quarter follows a difficult previous period when the company’s results failed to meet analysts estimate for the first time since Shopify opened in 2015. At the time, Shopify cited supply chain problems and rising inflation for disappointing results.
In its forecast for this year, Shopify also announced new contract terms with app developers and themes that will lead to “headwinds” for revenue from in-store subscription plans in the first half.
https://www.digitalcommerce360.com/2022/02/16/shopify-reports-earnings-warns-of-slowing-growth-outlook/ Shopify’s earnings report warns of a slowdown in growth prospects