You are here: Home » Reuters » News
Business Standard

Shopify profit forecast misses on higher spending, shares fall


By S Nair and Sarkar

(Reuters) - Canadian Shopify Inc's full-year adjusted operating income forecast fell short of analysts' estimates on Tuesday, overshadowing a strong quarterly profit beat and sending its shares down 4 percent.

Shopify, whose products enable merchants to sell everything from infant formula to cosmetics online, forecast adjusted operating income in the range of $10 million to $20 million.

Analysts on average were expecting $55 million, according to IBES data from Refinitiv.

Shopify said it would set aside about $30 million for brand promotions in 2019, as the company invests heavily to boost its presence in augmented reality and based applications.

In the fourth quarter, operating expenses surged about 53 percent to $195.2 million, as Shopify faces intensifying competition from such as and in the

The company said it expects revenue for the year to be in the range of $1.46 billion to $1.48 billion, while analysts on average were expecting $1.48 billion.

Some analysts said the revenue forecast was conservative. Shopify has outperformed initial forward-year top-line guidance in the last three years, said

Overall fourth-quarter revenue surged about 54 percent to $343.9 million, driven by higher holiday sales on its platform and merchant additions.

Shopify's net loss narrowed to $1.5 million, or 1 cent per share, in the three months ended Dec. 31.

Excluding items, the company earned 26 cents per share, beating the average estimate of 20 cents.

Shopify's U.S.-listed shares were down 4.2 percent at $165.73, while they were down nearly 4 percent on the Stock Exchange.

The Ottawa-based company's shares had risen about 17 percent this year through Monday, as investors cheered its tie-ups with Canada's booming cannabis industry and plans for international expansion.

(Reporting by Sarkar and S Nair in Bengaluru; Editing by Sai Sachin Ravikumar, and Sriraj Kalluvila)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, February 12 2019. 22:59 IST