E-commerce stocks are declining as consumers turn back online spending

Etsy website

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Shoppers are eager to return to brick-and-mortar stores, while inflation is fueling fears that consumers are spending back on some products yet to pay for the essentials.

The combination brings bad news for many e-commerce traders, and their shares fell on Thursday as a result of a broader market, which investors feared could halt their growth and make it harder to make a profit.

Shares of Wayfair were down more than 20% after hitting a 52-week low after online furniture retailers reported higher-than-expected losses in the first quarter and fewer active customers.

Wayfair CEO Niraj Shah told a conference call on Thursday morning that the “seasonal pattern of gradually building demand” that is used to continuing the business is happening in a “quieter” way.

He also said that more shoppers focus more of their portfolio on discretionary categories and “re-prioritize experiences like travel”.

Read more: Price hikes are forcing consumers to ask: Can I live without it?

Shares of Etsy fell 16% as a result of the heels of the online market, giving disappointing directions for the second quarter. Shares of Shopify fell nearly 17% in the first half of the year after forecasting lower revenue growth as it makes tough comparisons during the pandemic.

Poshmark, a second-hand online shopping site, saw its shares fall by about 15% around noon on ET. Thursday. Shares of The RealReal and Farfetch were down about 12%, while the shares of Warby Parker, ThredUp, Peloton and Revolve were down about 10%.

“The high-growth, negative EBITDA (and free cash flow) pandemic winners’ appetite is very low, ”Wells Fargo analyst Zachary Fadem said in a note to clients.

In a report released on Thursday morning, Mastercard SpendingPulse said total U.S. retail sales, excluding car sales, were up 7.2% from the previous year. Within this, e-commerce transactions fell by 1.8%, while retail sales rose by 10%.

Chuck Grom, an analyst at Gordon Haskett, wrote in a note to customers that consumers continue to gather evidence that they have just begun to reverse the rise in prices, “which will soon be a potential enigma for retail space.”

This story is unfolding. Please check back for updates.

E-commerce stocks are declining as consumers turn back online spending

Source link E-commerce stocks are declining as consumers turn back online spending

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