Consumers cut back on spending on e-commerce stocks

Those factors spell bad news for many e-commerce retailers, whose stocks plummeted Thursday amid market routs as investors feared their growth could sputter to a halt and profits could come at a costly price.

In the first quarter, Wayfair posted larger-than-expected losses and logged fewer active customers, hitting a 52-week low.

On Thursday morning, Wayfair CEO Niraj Shah spoke to analysts during a conference call. In this year’s seasonal pattern, the company has noticed an increase in demand steadily throughout the year.”

Furthermore, he confirmed that he did notice more shoppers consuming more non-discretionary items and “reprioritizing experiences like travel.”

Etsy shares collapsed 17% after the online marketplace released disappointing second-quarter earnings guidance. The stock of Shopify fell nearly 15% after the company said revenue growth for the first half of the year is expected to be lower. This is due to tough comparisons to the pandemic years.

Peloton, Revolve, Warby Parker, and ThredUp all fell around 9% on Thursday, while The Real Real and Far fetch both fell around 11%. Shares of Poshmark, an online site for second-hand shopping, ended Thursday about 4% lower.

Analyst Zachary Fadem of Wells Fargo says there isn’t much appetite among investors for high growth, negative EBITDA pandemic winners.

Mastercard Spending Pulse reported Thursday morning that total retail sales, excluding auto sales, rose 7.2% year over year. This was due to a 1.8% decrease in e-commerce transactions and a 10% increase in in-store sales.

Amazon’s waning momentum and depressed forecasts were evident a week ago. According to the company’s forecast, the slowdown is primarily due to macroeconomic conditions and Russia’s invasion of Ukraine. It recorded its slowest revenue growth since the dot-com bust in 2001.

Amazon ended the day 8% lower.

Gordon Haskett analyst Chuck Grom said that he expects consumers to start resisting rising prices within the next few months, “which will create a conundrum for retailers.”

Some of these companies will report their quarterly earnings next week; among them are Peloton, Poshmark, Thredup, and Allbirds. In the coming months, investors and analysts will be watching for signs of a slowdown in spending.