Shopify stock is surging Thursday after the e-commerce platform handily topped earnings and sales estimates.
Revenue rose by 25% this quarter to $1.7 billion, slightly ahead of estimates for $1.67 billion, according to FactSet.
Adjusted earnings of 24 cents a share were better than consensus calls for 15 cents a share. Gross merchandise volume (GMV) was $56.2 billion, up 22% year over year. Analysts had expected GMV of $54.3 billion.
Shopify
(ticker: SHOP) is seeing strength across both its core e-commerce and brick-and-mortar solutions. Point-of-sale solutions, for instance, are “kicking butt right now,” President Harley Finkelstein tells Barron’s. Larger retailers are flocking to Shopify in a bid to carve out their omnichannel offerings.
“These iconic, very modern brands, they’re channel agnostic,” he says. “They don’t really care where products are sold, whether it’s online or offline. And so their online experience is phenomenal, but so is their offline experience.”
Shopify stock is up 17% ahead of the opening bell Thursday. Shares are up 41% so far this year. The company’s fiscal-year guidance helped boost shares. Shopify expects full-year revenue to grow at a mid-20s percentage rate year over year, driven by strong projected fourth-quarter revenue.
“We’re coming into the busiest season of the year, sort of our Super Bowl,” Finkelstein says. “It seems like the consumer is really quite resilient.”
Fourth-quarter gross margins will be 3 to 4 percentage points higher than a year ago, the company said, primarily because of the absence of its logistics business, which was sold off earlier this year.
Profit has also improved following a series of cost-cutting initiatives, including a 20% workforce reduction in May.
“Operational discipline is coming through now,” Finkelstein said. “Can we deliver top-line growth and profitability? We can. We’re showing that now.”
Write to Sabrina Escobar at [email protected]
Read the full article here