Shopify laid out a long list of features and new partners — including hip brands like Supreme and Joopiter by Pharrell Williams — but is still working on getting back to profitability and winning over a wary Wall Street.
The Canadian company positions itself as something of a utility company for e-commerce, offering a long list of back-end services to help start-ups and established brands build online without having to tackle the tech themselves.
While the pandemic surge in e-commerce and subsequent slowdown caught Shopify by surprise and led to something of a stumble and layoffs last year, the company continued to add to its roster of brands.
In addition to Supreme and Joopiter, Shopify said Glossier and Skkn by Kim Kardashian joined up over the past year or so along with a host of non-fashion brands such as Mattel, Black and Decker and Feastables by Mr. Beast.
“We closed out 2022 with more merchants growing their businesses on Shopify and the caliber of brands choosing Shopify is not slowing down,” said Harley Finkelstein, Shopify’s president, who expanded on the Supreme connection made this year.
“In Q1 we have already welcomed the iconic streetwear brand Supreme,” Finkelstein said of the VF Corp.-owned brand on a call with analysts. “Supreme is one of the world’s biggest flash-sale retailers hosting more than 50 flash sales each year that are live for no more than a few minutes, which makes Shopify the ideal platform for supreme to continue growing their business.”
Shopify has continued to bolster its one-stop proposition by adding or expanding on a host of new services last year, including:
• Shop Promise, which gives merchants accurate anticipated delivery dates throughout their online shops.
• Tools to help brands “fast-track” custom storefront builds.
• Shopify Tax compliance tools for U.S.-based merchants.
• Shopify Functions, which helps larger brands customize out-of-the-box features.
• Shopify Market, which reduces barriers to global business and became available to all merchants.
But those services, and more, are expensive and Shopify has lost money as it pushed continued growth and scale.
Net losses for the fourth quarter expanded to $623.7 million, or 49 cents a share, from $371.3 million, or 30 cents, a year earlier.
Revenues for the three months ended Dec. 31 increased by 25.7 percent to $1.7 billion from $1.4 billion. The value of all the goods sold on the platform — Shopify’s gross merchandise volume — rose 13 percent and hit a new high of $61 billion. Shopify processed $34.2 billion through its own payment service.
The company, however, said revenue growth would slow in the first quarter, projecting an increase in “the high-teen percentages” with gross margins seen “slightly higher” than in the fourth quarter.
Investors were hoping for something more and sent shares of Shopify down 7.9 percent to $49.15 in after-hours trading Wednesday.
Shopify executives on the call focused on the company’s varied growth opportunities, its scale and its potential to work with more businesses.
“Shopify’s penetration of the U.S. e-commerce market is currently 10 percent, with this year’s GMV surpassing $197 billion, as GMVs has grown more than three times since 2019,” Finkelstein said. “Since our inception, Shopify has powered over half-a-trillion dollars in global commerce as we increasingly become the platform of choice for brands of all sizes.”