Retail Software Firm SPS Commerce Faces Record Rout On Outlook Cut
Synopsis
CEO Chad Collins flags global trade and economic uncertainty as a factor in the soft uptake of the company's retail management software.
- The retail software company’s shares fell by more than 32% in pre-market trade after its third-quarter report.
- Revenue for Q3 and the current year's outlook fell short of targets.
- CEO Chad Collins flags global trade and economic uncertainty as a factor in the soft uptake of the company's cloud software.
SPS Commerce, Inc.’s stock plunged by over 32% in early premarket trading on Friday, the second-highest slide among U.S. equities, after the software company missed revenue estimates for the third quarter and slashed the outlook for 2025.
SPS, which offers cloud software that helps retailers and suppliers manage orders, inventory, and shipping, now expects revenue of $751.6 million to $753.6 million this year, down from its prior guidance of $759 million to $763 million.
The lower guidance follows the company's third-quarter revenue, which rose 16% to $189.9 million, but fell short of the analysts’ target of $192.7 million.
“Despite ongoing global trade and economic uncertainty, and the spend scrutiny we’re seeing across some of our customer groups this year, we believe the ever-evolving retail ecosystem will continue to drive the need for supply chain efficiencies,” CEO Chad Collins said in a statement.
If the premarket move holds in the regular session, it would be the stock’s worst performance on record. The shares are fast approaching a low point seen in July 2022.
Notably, the stock declined for five consecutive sessions–a total of 7.6%– ahead of the earnings report. On Thursday, the SPS announced that its board had authorized the repurchase of up to $100 million of common stock.
On Stocktwits, the retail sentiment for the SPSC ticker shifted to ‘extremely bullish’ as of early Friday, up from ‘bullish’ the previous day. As of Thursday’s close, the SPSC stock had lost 44% of its value this year.
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