Shopify announces optimistic Q1, suspends 2020 outlook
Ottawa-based e-commerce company Shopify Inc. said on Wednesday that it is suspending its previous financial expectations provided for full-year 2020, as the Covid-19 crisis continues.
Nonetheless, it expects to report first-quarter earnings on May 6, 2020 that are within or ahead of its previously announced guidance.
“Shopify ended 2019 with momentum that continued into January and February of 2020. This will enable us to report revenue and adjusted operating income for the first quarter within or ahead of the range of expectations provided on February 12, 2020, despite the global economic disruption that emerged in March triggered by Covid-19,” the company said in a news statement.
Shopify is currently “analyzing the data across its platform for insights into how COVID-19 is affecting merchants’ operations in order to provide the most effective support.”
So far, the company said that early signs indicate that brick-and-mortar businesses are pivoting to online as consumer demand shifts. It also noticed an increase in the use of promotions by merchants to boost sales, as well as industry-specific sales trends.
In interim, the company is supporting merchants with initiatives like adding gift cards to all plans for all merchants, offering local in-store/curbside pickup and delivery for POS merchants, extending its 90-day free trial to all new standard plan signups and more.
It also announced that it will be making US$200 million in loans available to merchants through the company’s Shopify Capital program.
Shopify noted that in March, it terminated thousands of merchants charging unfair prices or making false claims about Covid-19-related items such as face masks or hand sanitizers.
Last year, Shopify’s total revenues hit $1.578 billion. Subscription solutions revenue grew 38 percent to $642.2 million, while merchant solutions revenue grew 54 percent to $935.9 million.
Despite the impressive progress, Shopify posted an annual net loss of $124.8 million, or $1.10 per share, compared with $64.6 million, or $0.61 per share, for 2018.
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