Shopify (SHOP 3.40%) is a company that provides software for building e-commerce operations. And its customer base of merchants appears to be doing very well. In the U.S., the day after Thanksgiving is known as Black Friday -- merchandise is marked down and shoppers scramble to find deals.
This Black Friday was record-breaking for Shopify. And that's why Shopify stock was up about 5% as of 10:45 a.m. ET, reaching its highest price per share since early 2022. Shares are up about 112% year to date.
NASDAQ: SHOP
Key Data Points
How good were sales on Friday?
According to Shopify, its merchants had sales of $4.1 billion on Friday alone, which was up 22% from Black Friday last year.
Shopify's gross merchandise volume was also up 22% in the third quarter of 2023. Therefore, the company appears to be continuing its momentum from the previous quarter as the fourth quarter gets underway.
It's important to also note that growth for Shopify's merchants is outpacing retail growth overall. According to an Adobe Analytics report cited by CNBC, spending on Black Friday was up 7.5% year over year overall.
According to Mastercard's Spendingpulse report, cited by Reuters, Black Friday sales were up only 2.5%.
Either way, Shopify's growth was far superior. And that's why the market is excited today.
Looking ahead to Q4
Shopify was expecting Q4 revenue growth only in the high-teens percentage range. But growth in sales for its merchants doesn't correlate precisely with the company's own revenue growth -- it offers a variety of services, so Shopify's revenue growth can exceed sales growth for merchants. Therefore, if its merchants can sustain the strong start to the holiday season, it's possible that Shopify can beat its guidance when it reports.
With e-commerce still a growth trend to watch, Shopify is well positioned for the future.
