MercadoLibre shares drop 12.9% due to reduced gross margin and slower growth expectations, despite 42% revenue increase.
MercadoLibre, a Latin American e-commerce platform, reported a 12.9% drop in its shares as it revealed a narrowing gross margin and expectations of slower growth, despite a 42% increase in revenue to $4.26 billion. The company's gross margin compressed by about 270 basis points due to lower shipping revenue, higher first-party revenue, and a smaller contribution in credit revenue. Investors may be concerned about the company's ability to maintain its rapid growth rate.
February 23, 2024
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