Shopify Inc. shares tumbled after the Canadian e-commerce company reported a surprise net loss in the first quarter after the sale of its logistics business last year.
The company posted a loss of $273 million after a profit of $68 million a year earlier. The loss per share was 21 cents on revenue of $1.86 billion, the company said in a statement on Wednesday.
The US-traded shares tumbled 18 percent in premarket trading in New York.
After rallying more than 120 percent last year, Shopify shares have struggled this year after the company had projected higher operating costs than expected for this quarter. The stock, which fell as much as 2.7 percent in US trading on Tuesday, is roughly flat in 2024, lagging the Nasdaq 100 Index.
Shopify is facing an uncertain economic environment and tepid consumer spending, while the sale of its logistics business to Flexport also weighed on financial results. The pace of revenue growth has slowed in the past few quarters to 23 percent in the first three months of this year. That compares with an average of 26 percent over the past four periods. Shopify said it expects second-quarter revenue to grow at a high-teens percentage pace. Gross margins for the second quarter are expected to fall by about 50 basis points.
Shopify has been on a drive to turn around its business as it seeks to reverse a late-pandemic slump. Last year the Ottawa-based company cut more than 2,000 jobs in May, the second culling of employees in 10 months, and sold the majority of its logistics unit to Flexport Inc. Last August, it struck a deal to allow merchants on its platform to use Amazon’s “Buy with Prime” service to deliver packages.
Gross merchandise volume, the overall value of merchant sales across Shopify’s systems, increased 23 percent in the first quarter to $60.9 billion, above Wall Street projections of $59.5 billion.
By Spencer Soper
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