Shopify’s blowout quarter showed consumers are buying through the trade war

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Companies are eating tariffs, but consumers are too.

Wednesday offered the latest example of a retail-focused business thriving amid a protracted trade conflict. Shopify’s (SHOP) latest results shattered profit expectations, leading to a nearly 21% surge in the stock, which is now flirting with pandemic-era highs.

While the jury is still out on whether the initial shock of the tariffs will be a one-time price-level increase or a prolonged inflationary event, what is clear is that the story from many companies is that consumers are simply adding to cart and checking out through it. Revenue for the e-commerce platform grew more than 30% from the same period last year.

“We had factored into our guidance some potential impact from tariffs, which did not materialize,” said CFO Jeff Hoffmeister on an earnings call Wednesday.

Executives did say that some merchants had increased their prices, but the company did not see any slowdown stemming from the tariffs. After the results posted, investors lifted the Ottawa-based Shopify to become the most valuable stock in Canada.

Shopify joins a host of other companies riding through the levies as an impressive season of corporate earnings has offset flagging economic data and lingering uncertainty. Other firms, notably the American appliance manufacturer Whirlpool (WHR), have explicitly championed the tariffs as a way to level the playing field.

“So far we are seeing no slowdown from the tariffs and that includes up until early August, where we are today,” said Shopify president Harley Finkelstein in an interview on CNBC Wednesday. “The millions of stores on Shopify are doing very, very well.”

If one of the narratives this quarter is the resilience of corporate earnings, a related lesson is the perseverance of mixed signals. There are twin economic dynamics at play: a weakening labor market but plenty of signs of reassuring consumer spending.

Given enough time, however, the full impact of tariffs and further jobs deterioration could finally put the squeeze on the American shopper. After all, buying your way through a trade war is a lot harder to do without a job.

But that potential inflection point, to the delight of retail-sector investors and people still working and swiping, hasn’t arrived yet.

Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban.

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