(Reuters) -Canada’s Shopify Inc reported its slowest quarterly revenue growth in about seven years and delivered a big miss on profit, sending the e-commerce giant’s U.S. shares tumbling 15% on Thursday.
Global e-commerce growth has eased from the frenetic pace seen during the pandemic when brick-and-mortar retailers set up an online presence to reach stuck-at-home customers. Rivals Amazon.com Inc and ebay have also disclosed the hit from slowing demand for online shopping.
Shopify’s first-quarter revenue rose 22% to $1.2 billion, a far cry from the nearly 100% growth during the early days of the pandemic. Analysts on average had expected revenue of $1.24 billion, according to Refinitiv IBES data.
Gross Merchandise Volume (GMV), a widely watched industry metric, rose 16% to $43.2 billion, but missed expectations of $45.43 billion.
Firms are also dealing with surging costs of transportation and labor, as well as customers reining in spending due to surging inflation.
To counter the slowdown, Shopify is ramping up investments to widen its delivery network to better compete with larger rivals.
Towards this, the company on Thursday announced a $2.1 billion cash-and-stock deal to buy logistics firm Deliverr. The U.S.-based firm delivers more than a million orders per month for thousands of merchants across the United States, the company said.
First-quarter adjusted profit per share of 20 cents was well short of expectations of 63 cents.
Total operating expenses jumped 67.3% to $735.6 million in the quarter.
U.S-listed shares of Shopify were trading at $418 in premarket trading. They have lost about 65% this year.
(Reporting by Eva Mathews and Richard Rohan Francis in Bengaluru; Editing by Rashmi Aich and Sriraj Kalluvila)
