But for now, chief financial officer Jeff Hoffmeister says Shopify’s merchants have “remained resilient” and thus, so has his company. “The business remains in very good shape,” he said on a Wednesday call with analysts.
Shopify stock jumps 22% after earnings release
Amid the discussion, Shopify’s shares jumped 22% to $213.11 in mid-morning trading on the Toronto Stock Exchange. The rise suggested the market was pleased with Shopify’s second-quarter profit, which compared with US$171 million a year ago.
The firm, which keeps its books in U.S. dollars, said the profit amounted to 69 cents US per diluted share attributable to shareholders compared with 13 cents US per diluted share a year earlier. Its net income excluding the impact of its equity investments for the quarter ended June 30 amounted to US$338 million, up from US$291 million a year ago. Revenue totalled US$2.68 billion for the quarter, up from US$2.05 billion in the same quarter last year.
The figures cover a period when trade relations between the U.S. and many of its allies, including Canada, continued to suffer as Trump threatened and often, imposed new tariffs. The tariffs increased operating costs for many businesses that produce and ship products across global borders.
Yet Hoffmeister said Shopify hadn’t seen “any meaningful changes” in cross-border activity or buyer behaviour. Customers didn’t even move up purchases to take advantage of lower pricing before tariff increases.
Retailers respond to shifting U.S. trade policy
Merchants, however, decided to prepare for trouble ahead anyway and many raised prices, he said.
The hikes could help combat the end of the de minimis exemption, which allows global businesses to ship packages valued at less than $800 to the U.S. without having to pay duties. The U.S. previously removed the exemption for China but recently expanded it to every other country.
Hoffmeister said only 4% of Shopify’s global gross merchandise volume—the value of all products sold through its software—is currently shipped under de minimis exemptions. “We’ve not seen any significant changes in our GMV levels related to merchants that shipped products under the de minimis exemptions for China, since those rules were changed back in May,” he said. “We’ll continue monitoring these trends closely, staying focused on supporting our merchants in an evolving environment.”
