Barron’s May 5th 2022 |Retail|Earnings Report|”E-Commerce Stocks are Tumbling as Earnings Confirm Investor Fears. Consumers Are Shifting Their Spending” “E-commerce retailers like EBay, Etsy, and Wayfair are cautious with their forecasts as consumers spend more on travel and dining out.” By Teresa Rivas
Read Barron’s for all the details
Summary provided by 2244
Figure from Bloomberg
After Thursday rise of the S&P500, NASDAQ and the DOW following the FEDs announcement to raise interest rates a record high 0.5%, the indexes as of 1:45 PM EDT Friday the indexes are down -3.26%, -4.67% and -2.85% respectively.
This Barron’s piece highlights the drivers behind the declines in a few prominent E-Commerce stocks. Teresa Rivas, the author of the Barron’s report notes, AMZN down -7.24%, EBAY -10.46%, ETSY -17.34%, SHOP -16.17% (Shopify) and W-19.68% (Wayfair). What seems to be troubling investors is not so much recent earning’s reports but the soft outlook going forward.
Why the slide for E-Commerce?
Consumers stocked-up during the pandemic
Consumers are adapting to inflation by spending less where they can
Consumers are now spending on “experiences like travel and dining out.”
Consumers are also returning to brick and mortar stores. We note, here in the RM2244 area, the retail parking lots are jammed.’’
Supply chain issues and inflation are also attenuating sales
Online furniture was big during the pandemic as consumers retrofitted for work-from-home but now this “industry is entering a ‘new normal.’”
All this has investors paring their investments in “the technology sector” in general.
Rivas concludes
“It’s not surprising that these companies are offering more restrained forecasts…”