Online commerce is no longer successful in the markets

Earnings warnings are multiplying in this sector, which is very popular with investors in 2020 and 2021. Result: These figures have returned to their pre-pandemic level.

This is one of the lessons to be learned in this last results season. After a boom during the pandemic, all companies directly or indirectly active in e-commerce saw their activities slow down in the first quarter of 2022. See for example PostNL

. The Dutch postal group reported on Monday19.4% drop in the volume of orders delivered between January and Marchcompared to the same period in 2021. This resulted in decrease of 80.4% in its normalized operating profit (Ebit) and of 16.3% in its revenues linked to this segment.



“The composition of consumer spending may temporarily rebalance itself in favor of services, in particular due to the rise in prices of certain goods, which will have an impact on the development of e-commerce”

Herna Verhagen

CEO of PostNL

“The performance in the first two months of the year is in line with our expectations. But with the start of the war in Ukraine, we saw pressure on order volumes and higher-than-expected costs“, explains its CEO Herna Verhagen in a press release.

She also points a tougher-than-expected macroeconomic environmentwith new inflationary pressuresvisible in rising fuel and labor costs, and ongoing constraints in the global supply chain. And to warn: “The composition of consumer spending may temporarily rebalance in favor of servicesdue in particular to the rise in the prices of certain goods, which will have impact on the development of e-commerce“.

PostNL therefore had to review your ambitions for the current year downwards. The company now has a normalized Ebit between 170 and 210 million euroscompared to a previously announced range of 210 to 240 million.

Even the giant Amazon is worried

It is not the first group active in online trading to issue such a profit notice. Your Belgian colleague bpost

announced Thursday night a 14.8% drop in B2X order volume in the first quarter“reflecting lower consumer spending and the internalization of Amazon.” And if he stuck to his annual projections, many analysts see his cautious speech as a “earnings warning.”

-1.5

%

For the first time since its inception, Zalando recorded a drop in its turnover in the first quarter of 2022. Its sales fell by 1.5% to 2.2 billion euros.

We also mentioned Zaland

. This German online fashion expert has lowered its growth target for 2022 after registering a drop in its turnover for the first time since its inception. “The main problem is that people just don’t want to buy fashion,” says co-CEO Robert Gentz.

the british group Boohoo

in turn warned that the trends observed in the first months of the year, namely the uncertain consumer demand and the headwinds to freight, will continue in the short term.

The situation is not much better on the other side of the Atlantic. the american giant amazon

predict net sales between $116 billion and $121 billion in the second quarter. Which is well below the 125.48 billion expected on average by analysts. Finally, the Canadian group Shopify

that allows you to create your e-commerce site in a few clicks, waits Weaker-than-expected revenue growth for the first part of 2022.

overvalued stocks

All these earnings warnings – unsurprisingly – caused market turmoil. Each of the aforementioned companies saw their shares lose around 10% on the day of their quarterly earnings release.

Investors who jumped into these stocks in 2020 and 2021, rightly anticipating a boom in online sales due to containment measures linked to the health crisis, have indeed realized that the e-commerce segment was overvalued on the stock exchange.



“Inflation doesn’t stop people from spending, but where they shop changes”

Because instead of continuing to buy online, consumers gradually returned to their pre-pandemic habits. “Inflation doesn’t stop people from spending, but where they shop changes,” said Zak Stambor on the specialized website eMarketer.

Therefore, the stock price of Amazon, Zalando, PostNL, etc. It’s back to pre-March 2020 levels. On the Brussels Stock Exchange, the bpost stock even touched a historic low Monday at 5.25 euros. According to several analysts, however, this inferior performance would be short-lived. They believe that the underlying fundamentals are still strong and that the pace of online sales growth is expected to accelerate again in 2023 given the ongoing digitization of our society.

In short

  • PostNL had to review your ambitions for the current year downwards. The Dutch postal group points a tougher-than-expected macroeconomic environmentwith new inflationary pressuresvisible in rising fuel and labor costs, and ongoing constraints in the global supply chain.
  • Other companies more or less active in e-commerce have also launched profit notice these last few weeks. The giant amazon forecasts sales below expectations for the second quarter.
  • Result: the stock price of Amazon, Zalando, PostNL, etc. It’s back to pre-March 2020 levels. On the Brussels Stock Exchange, the bpost stock even touched a historic low.
  • According to several analysts, however, this inferior performance would be short-lived. They believe that the underlying fundamentals are still strong and that the pace of online sales growth is expected to accelerate again in 2023.

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