Shopify Inc on Wednesday forecast slowing revenue growth for the current quarter despite price hikes and new product launches, signaling that macroeconomic challenges were weighing on its merchants' online businesses.
It expects revenue growth in the "high-teen" percentages, while analysts had forecast a rise of nearly 20%, according to Refinitiv data.
Still, Shopify added known brands and luxury labels from Swiss fashion designer Bally to chocolate maker Mars to a list of clients paying a premium price for its services. The company, which traditionally catered to small businesses, has been focusing on adding big brands to its clients list as they look to sell directly to consumers and use some of Shopify's website creation and payment tools to set up their stores.
"Investors were hoping that the headcount reductions and the price increases would translate to operating leverage and higher profitability, not a return to losses in the first quarter as is implied by guidance," said Gil Luria, analyst at D.A. Davidson. Fourth-quarter revenue rose 26% to $1.7 billion, compared with analysts' average estimate of $1.64 billion.Reuters Graphics Reuters GraphicsOur Standards:
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