Shopify Inc. produced a better holiday quarter than expected according to a Wednesday earnings report, but a forecast for slowing revenue growth hit the stock in after-hours trading. Shopify
sells e-commerce tools to merchants, a business that escalated quickly during the pandemic, as traditional bricks-and-mortar businesses jumped online to reach customers who could not visit their stores. Sales growth slowed last year, though, and Shopify recently announced it is increasing prices as it faces competition from Amazon.com Inc.
which is rolling out its rival Buy with Prime service to more retailers this year.
In their forecast, Shopify executives guided for revenue to grow “in the high-teen percentages” in the fiscal first quarter, while not providing a forecast for any profit metric nor for the full year. Analysts on average were projecting first-quarter revenue of $1.48 billion, according to FactSet, which would be revenue growth of more than 23%. For the fourth quarter, Shopify reported a loss of $623.7 million, or 49 cents a share, on revenue of $1.73 billion, up from $1.38 billion a year ago. After adjusting for stock-based compensation, gains on investments and other costs, the company reported earnings of 7 cents a share, down from adjusted earnings of 14 cents a share in the holiday quarter of 2021. Analysts on average expected an adjusted loss of a penny a share on sales of $1.65 billion, according to Fac …