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Shopify Sees E-Commerce Reset to Pre-Pandemic Trends, Warns of Wider 3Q Operating Loss

By Adriano Marchese

 

Shopify Inc. set expectations for a "different" 2022, calling it a transition year as e-commerce is expected to fall to pre-pandemic trend line and faces the added pressures of higher inflation.

On Wednesday, the Canadian e-commerce giant said that e-commerce has largely reset to a pre-Covid trend line and that it now faces pressures from higher inflation.

It said that it expects an adjusted operating loss for the second half of the year, with a peak in the third quarter that reflects time needed for the company's streamlining of its operations to take effect.

Shopify said that it expects gross merchandise volume, a metric which measures the value of transactions through its platform, to outperform the broader retail market in the second half of the year, despite still being affected by persistent inflation.

In step with gross merchandise volume, the company said that merchant solutions revenue will continue to grow as a percentage of gross merchandise volume, which will now also include contribution from the recently-acquired Deliverr business.

New merchants are expected to join the platform in larger numbers in the second half than in the first six months of the year, and Shopify said that revenue growth at its merchant solutions segment will be more than double that of subscription solutions growth for the full year.

Regarding expenses for the year, the company said it estimates stock-based compensation and related payroll taxes, capital expenses and amortization of acquired intangibles are now $750 million, $200 million and $62 million, respectively.

 

Write to Adriano Marchese at adriano.marchese@wsj.com

 

(END) Dow Jones Newswires

July 27, 2022 08:06 ET (12:06 GMT)

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