Harley Finkelstein, COO, Shopify
Scott Mlyn | CNBC
Shopify, which makes online tools for companies to sell products online, soared as much as 15.6% in early trading on Wednesday, hitting a new 52-week high of $786.07, after the company reported better-than-expected fourth-quarter results and gave upbeat guidance for the full year 2020.
For the fourth quarter, Shopify reported earnings of 43 cents per share, exceeding consensus estimates of 24 cents per share. Revenue jumped 47% year over year to $505.2 million, which was higher than analysts’ estimated $482.1 million.
Shopify’s 2020 full-year outlook topped analysts’ expectations. For the year, Shopify said it expects revenue to range from $2.13 billion to $2.16 billion, compared with consensus estimates of $2.11 billion.
The company reported higher holiday sales in its results. Shopify said it saw worldwide sales of over $2.9 billion between Black Friday and Cyber Monday, up about 61% from the same period in 2018.
Shopify’s stock has been on a tear so far this year, with shares up 40% year to date. By comparison the S&P 500 is up just 4% year to date.
In the earnings release, Shopify CEO Tobi Lütke said 2019 was a “milestone” year for the company, which lets small businesses sell goods and services to customers by setting up stores on its site. Lütke said Shopify now counts more than 1 million merchants on the platform.
Shopify has recently ramped up its investments to attract more merchants to its platform, setting aside $1 billion last year to build fulfillment centers in the U.S. as it takes on rivals Amazon and eBay. Analysts have said Shopify’s fulfillment investments should help it compete with Amazon by enabling it to deliver packages across the U.S. in two days or less.
The company said in the release that it expanded the number of “partners, merchants and nodes” in its fulfillment network, which helped it serve sellers during the holiday shopping season. Shopify CFO Amy Shapero said the company will continue to optimize its fulfillment network in 2020 to better help sellers and “energize the flywheel well into the future.”
— Reuters contributed to this report.
