: Shopify on Black Friday: ‘Cha-ching!’

by | Nov 28, 2022 | Stock Market

Shares of Shopify Inc. charged higher Monday after the e-commerce software company’s simple but exuberant reaction to record Black Friday sales — “cha-ching!” The company said its merchants recorded best-ever sales of $3.36 billion globally on the Friday after the U.S. Thanksgiving holiday, a 17% increase over last year’s Black Friday sales.

“At its peak, merchants on Shopify saw sales of $3.5 million per minute at 12:01 p.m. [Eastern time] on Black Friday, collectively,” Shopify said. That was about 13% more than the peak figure from last year. Shopify’s
stock climbed 2.9% in morning trading to buck the selloff in the broader stock market, with the S&P 500
down 0.8%. The top-selling categories were apparel and accessories, followed by health and beauty and home and garden, the company said. Those top categories were the same as last year’s. The average cart price, however, was $102.31, up just 1.1% from a year ago. That small increase in the current inflationary environment is one reason Benchmark analyst Mark Zgutowicz remains cautious on Shopify. He reiterated his hold rating on the stock. “With Shopify (and its merchants) strapped with escalating customer acquisition costs, coupled with only moderate [Black Friday average order value] growth relative to recent +8% [in the consumer-price index], it suggests decelerating growth” in gross merchandise value coming into 2023, Zgutowicz wrote in a note to clients. Oppenheimer’s Ken Wong was a little more upbeat about the Black Friday performance and outlook for gross merchandise value, especially given that retail sentiment was already biased negative. Given the strong growth in Thursday and Friday sales, which represent nearly half the sales of the overall Black Friday-Cyber Monday period — and with Saturday and Sunday sales growth tracking roughly in line with Black Friday growth — Wong said Cyber Monday sales “would have to decelerate considerab …

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