Shares of Shopify plunged more than 13% in premarket trading on Thursday after the company reported first-quarter results that missed analysts’ estimates, and said it will acquire logistics start-up Deliverr for $2.1 billion in cash and stock.
Shopify posted adjusted earnings of 20 cents per share, while Wall Street had expected 63 cents per share, according to a Refinitiv survey of analysts. Revenue grew 22% year over year to $1.2 billion, but that still fell short of Wall Street’s projected $1.24 billion.
The Canadian company, which makes tools for companies to sell products online, also announced it plans to acquire Deliverr, a San Francisco-based start-up that provides fulfillment services to merchants selling their wares across Amazon, Walmart, eBay and other online marketplaces. Deliverr ships over a million orders per month for thousands of merchants in the U.S., Shopify said.
“Being able to offer a delivery promise and fast fulfillment across all these channels boosts conversion,” Shopify CFO Amy Shapero said in a statement. “We are confident Deliverr’s ability to simplify the process, and arm merchants with visibility and control from the display of a delivery promise across multiple channels through its completion, will be a huge benefit to our merchants.”
Shopify also forecast that revenue growth would be lower in the first half of the year, as it navigates tough pandemic-era comparisons.
“While we’ve experienced massive macro shifts since the start of the pandemic, the one mainstay has been that Shopify is the commerce platform of choice for merchants in any environment, with the ability to support commerce on any surface,” Shopify president Harley Finkelstein said in a statement.
Shopify and other companies in the e-commerce sector are contending with rising concerns that they won’t be able to sustain the high-flying growth they enjoyed during the coronavirus pandemic. Shoppers flocked to online retailers during the pandemic, but e-commerce activity has cooled as the economy reopens and consumers return to stores. Amazon, Etsy and eBay have all forecast slowdowns.
WATCH: Consumer spending hits critical fork in road due to surging inflation, Peter Boockvar warns
