Short-term challenges won’t derail Shopify

Article Excerpt

Despite its current challenges, Shopify’s long-term outlook remains sound. The company has been expanding its business in recent years to provide more services for merchants. It has developed point-of-sale hardware for retailers, launched a shopping app for its merchants to list products and created a network of fulfillment centres to ship orders for its business partners. SHOPIFY INC., $48.13, remains a buy. The company (Toronto symbol SHOP; TSINetwork Rating: Extra Risk) (www.shopify.ca; Shares o/s: 1.2 billion; Market cap: $64.6 billion; No dividends paid) is now eliminating roughly 1,000 jobs, or 10% of its global workforce. Shopify feels the layoffs are necessary as consumers resume old shopping habits and pull back from the online ordering that fuelled its recent rapid growth. Shopify now expects revenue growth to slow this year. That’s due to rising interest rates, supply-chain shortages and the reversal of pandemic trends, including remote work and e-commerce shopping. The company will cut jobs in all its divisions, though most of the layoffs will occur in recruiting,…