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Shopify shares plunge 18% following weak forecasts

The logo of e-commerce company Shopify hangs on the building that houses the offices of Shopify Commerce Germany GmbH on August 8, 2022 in Berlin, Germany.

Sean Gallup | Getty Images

Shopify First-quarter earnings and sales on Wednesday were better than Wall Street’s expectations, but they gave pessimistic forecasts for the current quarter.

Shares fell as much as 18% in premarket trading.

Here are the company’s results for the quarter, compared to LSEG consensus expectations:

  • Earnings per share: 20 cents adjusted versus 17 cents expected
  • Income: $1.86 billion versus $1.85 billion expected

Second-quarter gross margins are expected to decline by about 50 basis points from the first quarter, due to the sale of Shopify’s logistics business to freight forwarder Flexport last May.

Shopify said it expects second-quarter revenue to grow at a high percentage rate year over year, a slowdown from the prior period. The company has reported year-over-year revenue growth in the low 20s for the past six quarters. Second-quarter revenue would increase year-over-year between “25 and 25,” taking into account the divestiture of the logistics business, Shopify said.

The company reported a net loss of $273 million, or 21 cents per share, compared with a profit of $68 million, or 5 cents per share, in the year-ago quarter.

Shopify, which makes tools that allow businesses to sell products online, said gross merchandise volume, or the total volume of merchandise sold on the platform, increased 23% to $60.9 billion. This beat consensus expectations of $59.5 billion, according to StreetAccount.

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