Shopify (TSX:SHOP) posted weaker-than-expected third-quarter earnings, the first time it has disappointed analysts since its 2015 initial public offering (IPO), as merchants did less business across its platform than expected.
The Canadian e-commerce giant also warned that supply-chain delays and inflation would mean that the fourth quarter -- including the key holiday shopping season -- would represent a smaller percentage of overall annual sales in 2021 than in the past.
Shopify stock fell more than 6% in pre-market trading before staging a turnaround and rising 4.4% to $1,421.00 U.S.
Adjusted earnings per share were $0.81 U.S. compared to estimates of $1.23 U.S.
Gross merchandise volume, the broadest measure of merchant sales flowing through Shopify, was $41.8 billion U.S., lower than analyst estimates of $43.43 billion U.S.
Shopify’s explosive growth accelerated during the global pandemic as widespread lockdowns caused people to embrace online shopping. As life has begun to return to normal, the biggest question for the company has been the extent to which the e-commerce boom could slow.
Shopify said that it expects the fourth quarter "to continue to grow substantially faster than the commerce market." And while revenue growth will slow this year, it will still be strong, it said.
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