CE 100 Index Down 0.3% as Shopping Losses Temper Porch, Affirm Gains

Earnings season is wrapping up.

And movement in the “Shopping” and “Live” pillars helped determine the fate of the CE 100 Index, which lost 0.3% this past week.

Shopping Names Lead Decliners

Shopping-related companies lost 2.7% overall, leading declining stocks in our pantheon.

And within that group, Ocado lost 12.2%. News came earlier this month that Ocado would acquire 6 River Systems from Shopify.

The warehouse automation firm, per the announcement, will become part of Ocado after four years under the Shopify umbrella.

Vroom lost 9.1%. As detailed in the company’s first-quarter results and in our own earnings coverage of the online car platform space, these firms are grappling with the need to sell down aged inventory while keeping profitability in sight.

“We expect a significant portion of our sales in the second quarter to be from aged units, which will put significant pressure on GPPU [gross profits] in the second quarter. We expect the back half of the year to show improved GPPU, as we sell a higher mix of unaged units,” CEO Tom Shortt said on the conference call with analysts.

Asked on the call about consumer demographics, Shortt noted, “We are definitely seeing a shift from primarily prime to a better mix across really the entire credit spectrum,” stating that amid interest rate increases, “We are seeing the mix of our prime customers come back to more normalized levels.”

For Vroom, in the latest quarter, eCommerce units slid nearly 80% to 3,933. And along with that plummet, eCommerce revenues were down roughly the same amount.

The average vehicle selling price per eCommerce unit was down 5.8% to $31,555. At the same time, it took longer to sell the vehicles themselves: The company said in its materials that the average eCommerce days to sale surged more than 206% to 279 days.

Affirm Holdings rallied 12.2% in the Pay and Be Paid segment, which lost 1.8% on the week overall.

As detailed here, Affirm’s latest quarterly results showed double-digit gains in gross merchandise value (GMV). Consumer spending surged in some categories and declined in others. Activity in verticals such as travel and ticketing was strong, as the categories grew by 62% year over year.

Direct-to-consumer products collectively delivered 24% year-over-year GMV growth.

But as management noted in its shareholder letter, there was “tepid consumer demand in several discretionary goods categories.” The consumer electronics category declined 8% year over year. The home/lifestyle category also declined 10% year over year, whereas it had grown 2% year over year in the fiscal second quarter.

Revenue was up 7% year over year, or up 15%, excluding Peloton, to $381 million.

Active merchant count grew 19% year over year to 246,000 merchants overall.

During the conference call with analysts, Max Levchin, Affirm CEO, noted that amid the rollout of Debit+, “We delivered Debit+ into the main Affirm app, and while it’s still quite early, we continue seeing strong signals of consumer demand.”

The 30-plus-day delinquency rate for monthly installment loans, ex-Peloton, improved sequentially to 2.5% at the end of March from 2.7% at the end of December.

Affirm’s gains were offset by PayPal’s 17.7% slump. In PayPal’s own quarterly results, the data show users are transacting more often across the company’s ecosystem.

The company’s earnings materials show that it ended the quarter with 433 million active accounts, up 1% year over year, including 35 million merchant accounts. Transactions per active account climbed 13% higher to 53.1.

Total payments volume gained 12% on a foreign exchange (FX)-neutral basis to $355 billion.

Peer-to-peer (P2P) total payments volume (TPV), which includes PayPal, Venmo, and Xoom, increased by 2% to $91 billion and represented 26% of TPV.

CEO Dan Schulman told analysts on the conference call that TPV from PayPal’s branded checkout “meaningfully accelerated” to 6.5% growth, while unbranded TPV was up 30% on an FX-neutral basis.

But, as he cautioned listeners on the call, “even with this strong start, there remain many challenging issues to navigate. As we look forward, both the macroeconomic and geopolitical environments are complex and difficult to predict in these times.”

Within the “Live” pillar, which gained 1.6%, Porch Group soared 25.7%. In the company’s earnings report, March quarter revenue of $87.4 million increased 37% compared to $63.6 million in the first quarter of 2022. Insurance gross written premium for the quarter was $115 million with approximately 376,000 policies.

In the “Have Fun” segment, which gathered a positive 0.2% performance, Roblox shares jumped 12.3%.

In the online gaming platform’s most recent results, the firm said that daily active users (DAUs) rose 22% to an all-time high of 66 million DAU. Roblox founder and CEO David Baszucki said on the conference call that across the platform, “hours are up 23% year-on-year, once again an all-time high of 14.5 billion hours of engagement in Q1.”

He also noted that the “13-and-up segment is growing 31% year-on-year, which bodes very well for our future growth.”

In “bookings” — tied to sales of its Robux virtual currency used for in-game purchases — purchasing rose 23% to $773 million in the quarter.