Ecommerce stocks are falling in value as shoppers head back to bricks-and-mortar stores and the high street as inflation rises.
Thursday saw a broad market sell-off for ecommerce-focused retailers, stoking investor fears that the sector’s growth could be grinding to halt.
Furniture retailer Wayfair’s stock dropped 26%, a year-on-year low, after it reported wider-than-expected losses in the first quarter and logged fewer active customers.
The company’s CEO Niraj Shah told analysts on a conference call Thursday morning that the “typical seasonal pattern of gradually building demand” that the business is used to tracking has been transpiring in a more “muted” fashion.
Shah also claimed to notice more shoppers devoting a larger proportion of their wallets to nondiscretionary categories and “reprioritising experiences like travel.”
Handmade goods platform Etsy shares fell 17% on the back of disappointing guidance for the second quarter.
Shopify stock dropped nearly 15% after predictions that revenue growth would be lower for the first interim of the year as it battles with Covid-era comparisons.
ThredUp and Poshmark were also down, 8% and 4% respectively.
“Investor appetite for high growth, negative EBITDA (and free cash flow) pandemic winners is very low,” Wells Fargo analyst Zachary Fadem said in a note to clients.
Amazon also lowered expectations for its revenue growth with a downbeat outlook after recording the lowest revenue growth since the dot-com crash in 2001.
