Shopify produced a better holiday quarter than expected, but a forecast for slowing revenue growth hit the stock in late trading.
Shopify Inc. produced a better holiday quarter than expected according to a Wednesday earnings report, but a forecast for slowing revenue growth hit the stock in after-hours trading.
Shopify SHOP sells e-commerce tools to merchants, a business that escalated quickly during the pandemic, as traditional bricks-and-mortar businesses jumped online to reach customers who could not visit their stores. Sales growth slowed last year, though, and Shopify recently announced it is increasing prices as it faces competition from Amazon.com Inc. AMZN , which is rolling out its rival Buy with Prime service to more retailers this year.
For the fourth quarter, Shopify reported a loss of $623.7 million, or 49 cents a share, on revenue of $1.73 billion, up from $1.38 billion a year ago. After adjusting for stock-based compensation, gains on investments and other costs, the company reported earnings of 7 cents a share, down from adjusted earnings of 14 cents a share in the holiday quarter of 2021.
Shopify’s stock has taken a hit amid a slowdown in pandemic-era growth for e-commerce, though they have turned around so far in 2023. The stock has declined nearly 40% in the past 12 months, but is up more than 53% so far in 2023; the S&P 500 index SPX has fallen 7.5% and gained 7.7% in those time periods, respectively.
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