E-commerce stocks plummet as consumers pull back online spending

Etsy website

Gaby Jones | Bloomberg | Getty Images

Shoppers are eager to return to brick-and-mortar stores and inflation has raised concerns that consumers are still slashing prices on some items.

The combination is bad news for many e-commerce retailers, and investor shares fell sharply on Thursday as growth stalled and profits could be hard to come by.

Wifi stock fell 26 percent to a fresh 52-week low after the online retailer posted more than expected losses in the first quarter and registered several active customers.

WiFi chief executive Niraj Shah told analysts at a conference Thursday morning that the "normal seasonal demand" that the company is accustomed to tracking was coming "from below." .

He also said many shoppers are giving away the bulk of their wallets to unwanted categories, "priorifying experiences like travel."

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Etsy shares fell 17% in the online market and posted a disappointing second quarter. Shopify's stock fell about 15% after earnings growth in the first half of the year is expected to slow compared to a strong Covid spell .

Shares in Real Estate and Fairfax fell 11 percent Thursday, shares in Peloton and Revolve each fell 9 percent, and shares in Warby Parker and ThredUp fell 8 percent. Poshmark , an online second-hand shopping site, said its stock fell 4% on Thursday.

Wales Investment analyst Zachary Fadem told clients: “Investor demand for strong growth, negative ETA breakouts (and free cash flow) is very low.

Total U.S. retail sales, excluding auto sales, rose 7.2% year over year, according to a report released Thursday morning by MasterCard Spending Pulses. According to the report, e-commerce transactions fell 1.8% and in-store sales rose 10%.

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A week ago, Amazon 's e-commerce buyer decided to slow down and take a weak position. The company reported the slowest revenue growth since the dot-com bus in 2001 and issued poor forecasts mainly due to macroeconomic conditions and the Russian invasion of Ukraine .

Amazon shares fell 8% on Thursday.

Gordon Hassett analyst Chuck Thunder continues to gather evidence that consumer prices are rising: “It could soon become a conundrum for retailers.

Some of those companies, including Peloton, Poshmark, Thredup, and Allbirds , are set to report quarterly results next week. Analysts and investors are closely watching the reversal signals.