Shopify beats earnings forecast but warns of slower growth amid Trump tariffs and trade policy shifts
Shopify outpaces Q1 earnings but tariff uncertainty clouds forecast
Live Events
Trump's tariffs cast a shadow over e-commerce outlook
Shopify bets on resilient consumer base and local commerce tools
(You can now subscribe to our
(You can now subscribe to our Economic Times WhatsApp channel
Canadian e-commerce giant Shopify reported better-than-expected earnings in its first-quarter results, but issued a cautious growth outlook for Q2, triggering a 5 per cent drop in its share price during early trading on Thursday, May 8. The company's results and guidance come as US-China trade tensions resurface under renewed Trump-era tariffs, shaking investor confidence across the e-commerce sector.Here's how Shopify performed in Q1:Revenue: $2.36 billion vs. $2.33 billion expectedAdjusted EPS: 39 cents vs. 26 cents expectedGross Merchandise Volume (GMV): $74.75 billion, just shy of $74.8 billion estimatesAlso read: Uber reports strong Q1 despite revenue miss, forecasts resilient demand with robust gross bookings outlook While Shopify surpassed revenue and earnings forecasts, it predicted gross profit to grow at a high-teens percentage rate in Q2 — slightly below analyst expectations of 20.1 per cent. The company also projected mid-twenties revenue growth for the next quarter, compared to Wall Street's 22 per cent forecast.Shopify, which powers online storefronts and offers services like advertising and payment processing tools, faces indirect exposure to geopolitical policies. President Donald Trump's sweeping tariffs — now totaling 145 per cent on Chinese imports — have closed a trade loophole that previously exempted sub-$800 shipments from China from US duties.Also read: Google stock falls as Apple signals interest in AI search rivals like Perplexity Despite this, Shopify's leadership appears unshaken. President Harley Finkelstein told investors the de minimis exemption closure would not have a 'meaningful impact' on business, noting that only around 1 per cent of the company's GMV involves imports previously covered by the exemption.'We haven't seen broad-based price increases among sellers,' Finkelstein said. 'We believe this helps insulate our merchants from some of the potential swings in pricing or other market factors, as higher-income consumers tend to be less price sensitive.'Finkelstein emphasized that over 50 per cent of Shopify's US buyers have household incomes above $100,000, giving the company some cushion against cost-related churn.In response to rising e-commerce tariffs and policy shifts, Shopify has been rolling out features to strengthen its merchant ecosystem. Earlier this year, the company introduced a 'Buy Local' tool enabling customers to filter and shop from businesses within their home country. This strategic move could help Shopify reduce reliance on global supply chains and mitigate tariff exposure.Also read: BCE slashes dividend to fund $5-billion Ziply deal and cut debt amid economic uncertainty While Shopify's subscription solutions revenue came in at $620 million — slightly under the $621.5 million projected — the broader 27 per cent revenue growth shows the platform's continued appeal amid market turbulence.Other e-commerce companies are also reacting to the trade shakeup. Amazon recently cited 'tariff and trade policies' as a concern in its softer Q2 guidance, while Etsy said it remains 'nimble' in response to the uncertainty. Etsy's CFO Lanny Baker noted that their direct tariff exposure is low, echoing similar sentiments to Shopify's position.As the Canada-US tech corridor adapts to unpredictable global trade policies, Shopify is leaning on its core strengths: scalable software, affluent customers, and a flexible merchant network. Whether that will be enough to power continued momentum remains to be seen.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
13 minutes ago
- Mint
China stocks end at nearly 3-week high as Sino-US trade truce sparks optimism
SHANGHAI, - China stocks climbed on Wednesday, touching their highest levels in nearly three weeks, lifted by optimism over progress in U.S.-China trade talks, although investors awaited further details on the framework agreed upon by the two countries. China's blue-chip CSI300 Index rose as much as 1.2% to its highest since May 23. Hong Kong's benchmark Hang Seng index climbed up to 1%, touching its strongest level since March 20. U.S. and Chinese officials said on Tuesday they had agreed on a framework to put their trade truce back on track and remove China's export restrictions on rare earths while offering little sign of a durable resolution to longstanding trade differences. "This is positive news to the market. At least now there's a bottom line that neither side is willing to cross," said Mark Dong, co-founder of Minority Asset Management. "Going forward, both sides will move toward reducing the trade imbalance." The two-day meeting in London followed a leader-to-leader phone call between U.S. President Donald Trump and China's Xi Jinping last week after tensions between the countries flared, with each accusing the other of violating the Geneva deal. Zeng Wenkai, the chief investment officer at Shengqi Asset Management, said markets had likely expected the outcome. "People have realised that kneeling gets you nowhere — in fact, it only invites more bullying," Zeng said, adding that countries are now adopting a tougher stance in negotiations with the U.S. The CSI Rare Earth Index gained more than 3%, while China's semiconductor index fell 0.1%. "The details matter, especially around the degree of rare earths bound for the U.S., and the subsequent freedom for U.S.-produced chips to head East," said Chris Weston, head of research at Pepperstone. "But for now as long as the headlines of talks between the two parties remain constructive, risk assets should remain supported." By market close, the CSI 300 Index rose nearly 1%, the Shanghai Composite Index gained 0.5% and the Hang Seng Index added 0.8%. Tech majors traded in Hong Kong advanced 1.1%. Chinese stocks have struggled for direction since April 2, when Trump announced his sweeping reciprocal tariffs. The CSI300 Index has barely budged from the April 2 level, and the Hang Seng Index gained around 5% during the period, both lagging the recovery among major global markets. China's auto stocks climbed nearly 2% after several major automakers, including BYD, Chery and Geely, pledged to pay suppliers within 60 days. This article was generated from an automated news agency feed without modifications to text.
India Today
22 minutes ago
- India Today
Tesla likely to rollout its driverless cab service on June 22, Uber goes to London in 2026
Tesla's long-awaited robotaxi dream may finally hit the road this month. CEO Elon Musk said on Tuesday that the company is 'tentatively' set to begin offering public rides in its self-driving vehicles on June 22 – starting in Austin, Texas. The announcement, made via a post on X (formerly Twitter), marks a key moment in Tesla's ambitious self-driving strategy. Musk has long staked Tesla's future on autonomous vehicles, moving away from plans to build cheaper electric cars in favour of what he believes is the future of transport. advertisementBut it won't be a full-speed launch just yet. Musk cautioned that the company is being 'super paranoid about safety' and the rollout date could shift depending on final checks. The pilot service is expected to begin with 10–20 Model Y SUVs, running in a limited area under remote human supervision. Musk also revealed that starting June 28, Tesla vehicles will begin driving themselves straight from the production line to customers' homes – another first for the industry, if delivered as promised. Tesla has been testing its Full Self-Driving (FSD) software on public streets in Austin. A recent video reposted by Musk showed a Model Y turning a corner autonomously, with the word 'Robotaxi' displayed on its side. advertisement Despite the excitement, very little is known about how Tesla's service will actually work – where it will operate, what kind of human oversight will be involved, or how people can book a ride. A successful robotaxi debut could be vital for Tesla, especially as EV sales have slowed, competition has grown, and Musk's polarising political affiliations have affected the company's reputation in Europe.'Austin >> LA for robotaxi launch lol,' Musk posted in a tongue-in-cheek jab at California's tighter autonomous vehicle regulations. During the ongoing LA riots, Waymo self-driving cars were also set on fire last week. Uber and Wayve set sight on LondonTesla's move comes as ride-hailing giant Uber also looks across the Atlantic. The company has announced it will launch its first robotaxi trial in London in 2026, in partnership with British AI startup Wayve Technologies Ltd. Unlike Tesla's bold, no-human-inside approach, Uber's pilot will begin with drivers at the wheel – what the industry calls Level 4 autonomy. This is often used as a stepping stone to full automation. Uber said it expects to reach that fully autonomous milestone soon, although it hasn't offered a specific timing is helped by new legislation in the UK. The Automated Vehicles Act, recently passed by Parliament, sets up a fast-track framework to get self-driving buses and taxis onto public roads. 'The future of transport is arriving,' said UK Transport Secretary Heidi Alexander. 'Self-driving cars could bring jobs, investment, and the opportunity for the UK to be among the world leaders in new technology.'Waymo leads the way, but faces challengesWhile Tesla and Uber are racing to enter the market, Waymo, owned by Alphabet (Google's parent company), remains ahead in many ways. Its Waymo One service is already offering over 200,000 paid rides per week across San Francisco, Phoenix, Los Angeles, and Austin. Waymo plans to expand to more cities in the US, including Atlanta, Miami, and Washington, DC, where it's working with local policymakers to allow for fully driverless services – something not yet legal in the being first doesn't mean being flawless. The US National Highway Traffic Safety Administration recently opened an investigation into Waymo, after 22 reports surfaced of unexpected behaviour and traffic safety violations. In the past year, Waymo has also had to recall over 1,000 vehicles following minor accidents and software errors. Still, the company maintains that its cars are significantly safer than human drivers, citing data from 50 million rider-only miles showing 81 per cent fewer In
Time of India
26 minutes ago
- Time of India
Elon Musk says sorry: Five ways Donald Trump might react – from most to least likely
In a striking reversal, billionaire Elon Musk has walked back his recent attacks on US President Donald Trump, tweeting on Wednesday: 'I regret some of my posts about President @realDonaldTrump last week. They went too far.' The apology comes just days after Musk accused Trump of appearing in the sealed Epstein files, described his landmark legislation as 'an abomination,' and even floated JD Vance as a better presidential candidate. He had also expressed support for Trump's impeachment—before swiftly deleting the posts. The episode marks a rare climbdown for Musk, whose public persona has thrived on provocation. But whether Trump accepts the olive branch remains unclear. Trump's initial response was dismissive yet ambiguous. Asked at a White House press conference whether he would speak to Musk, Trump said: 'I haven't really thought about it… Maybe he's already called. You'd have to ask him. I'd have no problems with it.' The tone, while noncommittal, contrasts sharply with his past remarks, where he called Musk 'a man who has lost his mind', 'a big-time drug addict,' and someone who had 'gone CRAZY!' for criticising his EV mandates. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 5 Books Warren Buffett Wants You to Read In 2025 Blinkist: Warren Buffett's Reading List Undo Trump also warned that Musk could lose government contracts if he backed Democrats. By week's end, the former president had offered what sounded like a final word: 'Wish Elon well.' In Trumpian lexicon, it's often a euphemism for political exile. Here are some possible reactions from Trump: 1. The Cold Shoulder: 'I don't think about Elon' Most Likely Trump's go-to move when crossed: pretend he's unbothered while subtly twisting the knife. He's already said, 'Wish Elon well,' and 'Maybe he's already called.' Expect more of this 'I'm too important to care' posture. 'I don't care about Elon. Never did. But he's been very disloyal. Sad!' 2. Mockery Mode: 'Elon's on drugs again' Highly Likely Having already branded Musk a 'big-time drug addict,' Trump won't resist the temptation to suggest the apology was ketamine-fuelled. It's cruel, personal, and exactly his style. 'Looks like Elon's dealer cut him off—now he's begging for forgiveness.' 3. Revenge with a Smile: 'He knows I'm winning' Very Possible Trump might treat the apology as an admission of defeat. In his world, apologies = weakness. Expect a victory lap on Truth Social. 'Even Elon knows who the real leader is. He wants back in. Not happening!' 4. The WWE Heel Turn: 'Elon's a loser, always was' Somewhat Likely If Trump feels Musk is still a threat—or if Musk dares to hedge his loyalties—expect a scorched-earth takedown, complete with Tesla jabs and X mockery. 'Tesla's collapsing. Twitter's a mess. Elon's a fraud—always was!' 5. Transactional Forgiveness: 'We'll see what he does next' Least Likely—for now While Trump is transactional, this usually comes after public humiliation. Unless Musk grovels publicly or pledges fealty to Trump 2024, forgiveness remains off the table. 'If he plays ball, maybe. But actions speak louder than weird tweets.' Bottom line: Trump doesn't forgive; he negotiates. And he never lets a billionaire apology go to waste without squeezing it for attention, dominance—or revenge.
