An employee works at Shopify’s headquarters in Ottawa, Ontario, Canada.
Chris Wattie | Reuters
Shopify’s shares plunged more than 13% in premarket trading Thursday after the company reported first-quarter results that missed analysts’ estimates and said it will take logistics start-up Deliverr for 2, Acquire $1 billion in cash and stock.
Shopify posted adjusted earnings of 20 cents per share, according to a Refinitiv poll of analysts, while Wall Street had expected 63 cents per share. Revenue rose 22% year over year to $1.2 billion, but that still fell short of the $1.24 billion forecast by Wall Street.
The Canadian company, which makes tools for businesses to sell products online, also announced plans to acquire Deliverr, a San Francisco-based start-up that helps merchants buy their goods through Amazon, Walmart, eBay and others Selling online marketplaces, offering fulfillment services. Deliverr ships over a million orders a month for thousands of merchants across the US, Shopify said.
“Being able to offer a delivery promise and fast fulfillment across all of these channels increases conversion,” said Amy Shapero, Shopify’s CFO, in a statement. “We’re confident that Deliverr’s ability to simplify the process and give merchants visibility and control from displaying a delivery promise across multiple channels through to completion will be a major benefit to our merchants.”
Shopify also forecast that revenue growth would be slower in the first half of the year as it weathers harsh comparisons from the pandemic-era.
“While we’ve seen massive macro-level changes since the beginning of the pandemic, the one mainstay has been that Shopify is the commerce platform of choice for merchants in any environment, with the ability to support commerce on any surface,” said Harley Finkelstein, Shopify’s president said in a statement.
Shopify and other companies in the e-commerce sector are struggling with growing concerns that they won’t be able to sustain the rapid growth they’ve been experiencing during the coronavirus pandemic. Shoppers have flocked to online retailers during the pandemic, but e-commerce activity has cooled as the economy reopens and consumers return to stores. Amazon, Etsy, and eBay all have forecast slowdowns.
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