Shares of Shopify plunged Wednesday after the Canadian company that helps retailers with online sales warned of easing revenue growth and thinner margins in the current quarter.
That caught a lot of investors off guard after the company rebounded strongly from the pandemic and started 2024 with a bang.
Shopify Inc. predicts that revenue will climb by a high-teens percentage rate for the second quarter, well below the 23% jump in the first quarter.
The e-commerce company anticipates quarterly gross margin will decrease by about 50 basis points compared with the first quarter, when that measured 51.4%.
Shares slid 19.5% in afternoon trading, a bit of a recovery after having been down more than 21% earlier.
For the first quarter, Shopify reported an adjusted profit of 20 cents per share on revenue of $1.86 billion. Analysts polled by Zacks Investment Research expected a profit of 16 cents per share on revenue of $1.84 billion.
During a conference call Wednesday, Chief Financial Officer Jeff Hoffmeister said that while consumer spending in North America remains resilient, some softness in Europe and a strong U.S. dollar are factored into its outlook.
Europe’s economy perked up slightly at the start of the year, recording 0.3% growth in the January-March quarter compared to the last three months of 2023. But the economy has been held back by high inflation that has sapped consumer purchasing power, and by an energy price spike related to Russia's invasion of Ukraine.
Meanwhile, in the U.S. consumers remain largely resilient, but some other companies have noticed a pullback in spending from customers.
Starbucks lowered expectations for its full-year sales and profit in late April after a disastrous quarter that saw a slowdown in store visits worldwide. In the U.S., Starbucks saw a sharper and faster decline in consumer confidence and spending than it had anticipated.
The Conference Board, a business research group, said late last month that U.S. consumer confidence fell for the third straight month in April as consumers continue to confront elevated prices and high interest rates.
McDonald’s said late last month that it plans to increase deals and value messaging to combat slowing sales.
The Chicago fast food giant said inflation-weary customers are eating out less often in many big markets. In the first quarter, fast food traffic was unchanged or down in the U.S., Australia, Canada, Japan, the United Kingdom and Germany.
The government is slated to report retail sales for the month of April next week, which should offer some more insight into shopping behavior.
AP Retail Writer Anne D'Innocenzio in New York contributed to this report.
FILE - The Ottawa, Ontario, headquarters of Canadian e-commerce company Shopify is seen, May 29, 2019. Shopify's stock is poised to potentially tumble to an all-time low Wednesday, May 8, 2024, as the company gave a disappointing second-quarter forecast that includes easing revenue growth and thinner margins. (Justin Tang/The Canadian Press via AP, File)
SANTO DOMINGO, Dominican Republic (AP) — Voters in the Dominican Republic cast ballots Sunday in general elections likely to reinforce the government's crackdown on its shared border with Haiti and the hundreds of thousands of people fleeing the violence-stricken nation.
Leading the presidential race is President Luis Abinader, who is seeking reelection as one of the most popular leaders in the Americas. If he tops 50% of the vote, he will win another term without proceeding to a second round of voting.
Trailing him are former President Leonel Fernández and Mayor Abel Martínez. Dominicans are also voting in legislative elections.
Many of the 8 million eligible voters in the Dominican Republic are still traumatized by an electoral authority decision to suspend the 2020 municipal election due to a technical glitch.
Abelardo Ubrí Antomarche, a teacher who lives in capital city of Santo Domingo, was one of the first to vote shortly after 7 a.m.
“We need to vote, no matter how,” he said.
The voting centers in the Dominican Republic will be open until 5 p.m. (2100 GMT), with first results expected a few hours later.
Abinader's anti-corruption agenda and push to grow the Dominican Republic's economy has resonated with many of the 8 million voters in the Caribbean nation. Much of his popularity, however, has been fueled by the government's harsh crackdown on Haitians and the border the Dominican Republic shares with its crisis-stricken neighbor.
“This migratory problem worries me, because we're seeing a massive migration from our neighbor and it feels like it's out of control,” said Perla Concepción, a 29-year-old secretary, adding that migration was her main concern as she takes to the polls.
The Dominican Republic has long taken a hard line stance with Haitian migrants, but such policies have ramped up since Haiti entered a free fall following the 2021 assassination of President Jovenel Moïse. As gangs have terrorized Haitians, the Dominican government has built a Trump-like border wall along its 250-mile (400-kilometer) border. He has also repeatedly urged the United Nations to send an international force to Haiti, saying such action “cannot wait any longer.”
The government has also rejected calls to build refugee camps for those fleeing the violence and carried out mass deportations of 175,000 Haitians just last year, according to government figures. While the policy is popular among voters, it has provoked sharp criticisms from human rights organizations which call the policy racist and a violation of international law.
"These collective expulsions are a clear violation of the Dominican Republic’s international obligations and put the lives and rights of these people at risk. Forced returns to Haiti must end,” Ana Piquer, Americas director at Amnesty International, wrote in an April report.
Incumbent President Luis Abinader, who is seeking re-election for the Modern Revolutionary Party, votes during general elections in Santo Domingo, Dominican Republic, Sunday, May 19, 2024. (AP Photo/Matias Delacroix)
A voter is assisted by electoral official to cast his ballot during general elections in Santo Domingo, Dominican Republic, Sunday, May 19, 2024. (AP Photo/Matias Delacroix)
Incumbent President Luis Abinader, who is seeking re-election for the Modern Revolutionary Party, votes during general elections in Santo Domingo, Dominican Republic, Sunday, May 19, 2024. (AP Photo/Matias Delacroix)
Voters line up outside a polling station during general elections in Santo Domingo, Dominican Republic, Sunday, May 19, 2024. (AP Photo/Ricardo Hernandez)
Electoral officials assist a voter to cast his ballot during general elections in Santo Domingo, Dominican Republic, Sunday, May 19, 2024. (AP Photo/Matias Delacroix)
A Haitian street worker sells kites at a traffic light in Santo Domingo, Dominican Republic, Saturday, May 18, 2024. (AP Photo/Matias Delacroix)
Vendors, mostly Haitians, sell and buy goods at a market in the border town of Dajabon, Dominican Republic, Friday, May 17, 2024. As violence and political turmoil grip neighboring Haiti, the Dominican Republic will hold elections Sunday that have been defined by calls for more crackdowns on migrants and finishing a border wall dividing the countries. (AP Photo/Matias Delacroix)
A cook dumps rice into a steaming pot at a market in the border town of Dajabon, Dominican Republic, Friday, May 17, 2024. As violence and political turmoil grip neighboring Haiti, the Dominican Republic will hold elections Sunday that have been defined by calls for more crackdowns on migrants and finishing a border wall dividing the countries. (AP Photo/Matias Delacroix)
A boy stands on the bumper step of a paddy wagon holding undocumented Haitians detained by immigration officials, in Dajabon, Dominican Republic, Friday, May 17, 2024. As violence and political turmoil grip neighboring Haiti, the Dominican Republic will hold elections Sunday that have been defined by calls for more crackdowns on migrants and finishing a border wall dividing the countries. (AP Photo/Matias Delacroix)
Migration officials detain undocumented Haitians in Santo Domingo, Dominican Republic, Thursday, May 16, 2024.As soaring violence and political turmoil grip neighboring Haiti, Dominican Republic’s election on May 19 has been defined by calls for more migratory crackdowns and finishing a border wall dividing the countries. (AP Photo/Matias Delacroix)
A national flag flies over a miles-long wall built by the Dominican Republic, that runs along the Haitian border, as seen from Pepillo Salcedo, Friday, May 17, 2024. As soaring violence and political turmoil grip neighboring Haiti, the Dominican Republic will hold elections Sunday that have been defined by calls for more crackdowns on migrants and finishing a border wall dividing the countries. (AP Photo/Matias Delacroix)
People wait in Ouanaminthe, Haiti to cross into Dajabon, Dominican Republic, Friday, May 17, 2024. As soaring violence and political turmoil grip neighboring Haiti, Dominican Republic’s election on May 19 has been defined by calls for more migratory crackdowns and finishing a border wall dividing the countries. (AP Photo/Matias Delacroix)
A political billboard with a message that reads in Spanish: "Better health coverage for the most vulnerable sectors", promotes the candidacy of incumbent President Luis Abinader, who is running for reelection, in Santo Domingo, Dominican Republic, Thursday, May 16, 2024. (AP Photo/Matias Delacroix)
Haitians cross the border into Dajabon, Dominican Republic, Friday, May 17, 2024. As violence and political turmoil grip neighboring Haiti, the Dominican Republic will hold elections Sunday that have been defined by calls for more crackdowns on migrants and finishing a border wall dividing the countries. (AP Photo/Matias Delacroix)
