Amazon, eBay, Wayfair, Etsy, Shopify, Chewy, The Honest Co. online retail inventory slump as people shift spending from goods to services
On shitty earnings and lowered forecasts, many of these high-profile stocks are off last year’s highs by -70% to -85%.
By Wolf Richter for WOLF STREET.
As consumers shift their spending from goods sold by retailers to services, demand for goods fueled by the miracle stimulus is returning to pre-pandemic trends. Demand for services, which had collapsed during the pandemic, has increased towards pre-pandemic trends. And online retailer stocks, after the hype and hype for them during the pandemic, are now shaken.
A large number of online retailers reported earnings in the past 24 hours and lowered their outlook, and what had happened to Amazon [AMZN] happens to them now too.
Amazon had plunged 14% on April 29 after reporting a big loss, the slowest revenue growth since the dotcom meltdown and exorbitant spending, topped off by sickening forecasts. Today, Amazon is down another 7.6% to $2,328.14 in April 2020, and is down 38% from its high of last July, despite all the financial engineering (a split 20-for-1 stock buybacks and mega share buybacks) announced in March. in order to stem the decline by then already underway (data via YCharts):
Wayfair published its results today. Revenue plunged 13.9% from last year’s miracle stimulus first quarter to $3 billion, having already plunged 11% in the previous quarter. The number of active customers fell 23.4%, he said. He revealed a whopping $319 million loss.
The only year the online furniture and home furnishings retailer turned a net profit was 2020, a miraculous year of relaunch and lockdown. Over the past five years, including the first quarter of this year, it has lost a total of $2.0 billion.
Wayfair has been one of the mega-beneficiaries of the stimuli-fueled frenzy and consumer lockdown to buy all kinds of goods online, to stock up on things and to spruce up their homes, given that they would be spending so much more time in them.
In response to this mess, and in belated response to the Fed yesterday, and in response to the ridiculous course of action during the pandemic, Wayfair shares [W] kathoomphed 25.6% today, and 80% from its March 2021 high, to $67.49 per share, a figure for the first time since June 2017 (data via YCharts):
Shopify, the Canadian e-commerce platform, reported that his net income dropped 90% to $25 million, but at least he’s still making money, unlike some of our other heroes here, like Amazon and Wayfair. Gross merchandise volume increased 16% and revenue from its Merchant Solutions segment jumped 29%.
But it lowered its earnings growth outlook, and stocks [SHOP] plunged 14.9% today to $413.09, down 77% from its November 2021 high. And back to August 2019 (data via YCharts):
Etsy, the online craft market, reported that revenue only increased by 5% and net income fell by 40%, but at least he had net income. And it gave disappointing advice, oopsiespalooza.
Etsy Stocks [ETSY] was shaken, -16.8% today at $90.93 and -71% from the November high:
eBay, which has been marginally profitable for years, announced a net loss of $1.3 billion last night – compared to net profit of $568 million in the year-ago quarter – due to a loss of his stock holdings. It saw a 6% decline in revenue, with gross merchandise volume down 20%. And he lowered his guidance. Shares are up 11.7% today at $48.04, down 41% from the November 2021 high.
Other Online Retailer Startups Have Been Duped Too.
The Honest Co., which featured in my imploded stocks in March, plunged 10.5% today to $3.85 and slumped 84% from its May high a year ago:
Soft [CHWY]the online pet food retailer that has increased pandemic stock jockeys’ fascination with pets – fell 10.8% today to $29.00 and 76% from its February 2021 summit:
stitch correction [SFIX] fell 3.8% today, to $10.27, taking the collapse from last year’s June high to 85%:
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