The stock fell 7% to $29.34 in early trade on New York Stock Exchange. Shopify said in a statement it now expects 2022 to be “more of a transition year, in which ecommerce has largely reset to the pre-Covid trend line and is now pressured by persistently high inflation.”
The Ottawa-based company posted a loss of 3 cents per share on an adjusted basis in the second quarter, falling short of estimates for a profit of 3 cents, according to data compiled by Bloomberg. Revenue rose 16% to $1.3 billion from a year earlier, broadly in line with expectations of $1.33 billion.
The worse-than-expected results came one day after
Shopify said it was cutting its workforce by 10% amid a softening in online sales — amounting to roughly 1,000 jobs.
The shares dropped 14% Tuesday as chief executive officer (CEO) Tobi Lutke acknowledged that the company’s rapid expansion during the pandemic was unsustainable. Shopify has plunged 77% this year as of Tuesday’s close.
Gross merchandise volume (GMV) — the value of merchant sales flowing through Shopify’s platform — grew 11% to $46.9 billion during the quarter, missing estimates of $48.6 billion.
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The shift out of pandemic lockdowns, elevated inflation, and the threat of a recession has shifted consumer habits. Retail stocks fell earlier this week after Walmart made a surprise cut to its profit outlook as surging prices cause consumers to spurn bigger-ticket purchases.
Amazon is set to release results on Thursday, with other ecommerce stocks including Wayfair, eBay, and Etsy reporting this week and next.
