Shopify: Q1 may beat estimates, pulling annual guidance
Shopify Inc. is withdrawing its 2020 earnings guidance due to the impact of COVID-19, but expects first-quarter revenue and adjusted earnings to be within or ahead of prior estimates.
The company, in February, told Wall Street analysts it expected an adjusted operating loss of $30 million to $34 million in the first-quarter and revenue of $440 million to $446 million. The annual forecast called for an adjusted operating loss of zero to $20 million and revenue of $2.13 billion to $2.16 billion.
The company did not offer a revised forecast for the year, but said it will update guidance when it reports earnings on May 6, according to a press release.
The e-commerce platform said it has been analyzing data from its merchant partners and is seeing a number of patterns since March 8.
- Brick-and-mortar retailers are shifting to online sales due to the loss of foot traffic, following stay at home orders.
- Merchants are heavily discounting to boost sales.
- Sales trends are aligning to specific industries, based on the evolving environment, consumer concerns and needs.
- Shopify terminated thousands of merchants from its platform for price gouging or making unfounded claims regarding COVID-19-related items like masks and hand sanitizers.
Shopify said it has also extended additional help for merchants by offering the following:
- Extended free 90-day trial for new standard plan signups.
- Gift card availability for all plans and merchants.
- Local in-store/curbside pickup for POS merchants.
- A $200 million commitment for Shopify Capital, while fast tracking expansion to new markets, including the U.K., where it launched on March 30.
- Online resources for merchants, including information on government funding and other help.