E-commerce platform Shopify is expecting sales to slow down in the coming quarter, despite a double-digit increase during its first quarter.
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Shares of Shopify plunged by 19% in early hours, trading at $62, after it reported first quarter earnings, in which it warned that the sale of its logistics business would impact second quarter revenue.
The Canadian company, which provides online merchants with infrastructure to run their business, said it expects revenue to grow at a high-teens percentage rate during the second quarter. That outlook is in stark contrast to the 23% increase in revenue it made during the first quarter of this year.
Shopify pointed to its sale of its logistics business to Flexport in May 2023 as the main reason for its drag in sales.
For the first quarter, Shopify said it swung to a net income loss of $273 million, or $0.21 cents a share, compared with a profit $68 million, or $0.50 cents a share, it made during the same period last year.
That didn’t keep Shopify from modestly beating Wall Street’s expectations. During the first quarter, the global e-commerce company reported revenue of $1.86 billion, about $0.20 cents a share. Analysts forecasted it would report $1.85 billion, approximately $0.17 cents a share. It’s revenue was largely led by its merchant solutions unit, according to the company’s earnings release.
“Looking ahead, we are committed to upholding our operational discipline and strong execution,” Jeff Hoffmeister, Shopify’s CFO, in a statement.