(Reuters) -Canadian e-commerce platform Shopify forecast its slowest quarterly revenue growth in two years against the backdrop of an uncertain economy and tepid consumer spending, sending its U.S. shares slumping 16.5% in premarket trading.
While e-commerce growth has been normalizing after a post-pandemic slump, consumers have been looking to cut down on costs, putting Shopify at a disadvantage despite price hikes and new AI-based tools.
Adding to the company's pressure, its core clientele is made up of small and medium-sized businesses (SMBs) that have been more susceptible to the hit from sticky inflation.
The company said on Wednesday it expected second-quarter revenue to grow at a high-teens percentage, disappointing investors who had seen average growth of about 26% over the past few quarters.
Analysts estimated current-quarter revenue to grow 19.35%, according to LSEG data.
The company expects operating expenses to be up at a low-to-mid-single digit percentage rate for the second quarter, compared with a 4% fall in the first three months of the year.
The results included the impact of the sale of its logistics arm to freight forwarder Flexport.
Shopify reported first-quarter revenue of $1.86 billion, compared with analysts' average estimate of $1.85 billion.
Excluding items, earnings of 20 cents per share also topped expectations of 17 cents.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Sriraj Kalluvila)
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2024-05-08 12:13:28Z
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