Shopify’s first-quarter revenue and profit fell significantly short of analyst projections. The Canadian eCommerce company has cut its full-year projection due to a lack of new merchants.
Shopify is dealing with shoppers returning to physical stores, rising inflation, and labour shortages, according to CFO Amy Shapero.
According to Shapero, lower merchant adds this year reflect a tight and transitory labour market. “We expect the labour market to ease.”
At least seven analysts dropped their price estimates on Shopify Wednesday, continuing a trend that began weeks before the results report. The company’s stock has dropped about 70% in a year. They’re presently 2% below where they were when the WHO declared COVID-19 a global pandemic in March 2020.
Online shopping is slowing as the COVID-19 pandemic fades, causing eCommerce companies to tank this earnings season. Its revenue prediction was lower than projected, therefore Amazon.com Inc.’s stock dropped the most since July 2006.
Shopify revenue
Shopify’s Q1 sales increased 22% to $1.2 billion. But they fell short of analysts’ $1.25 billion projections, according to Bloomberg.
Gross merchandise volume (GMV) increased 16% year-on-year to $43.2 billion. GMV is the value of platform merchant sales. Analysts projected $46.5 billion GMV.
Ottawa-based Shopify earned $25.1 million, or 20 cents per share, in the first quarter. Analysts expected 64 cents per share. It also falls short of Q1 2017 earnings of $254.1 million. In 2022, the corporation expects fewer new business customers. It predicted merchant growth would be “comparable” to 2021.
