While reporting a disappointing revenue total and holiday forecast Wednesday afternoon, ContextLogic Inc. said founder Piotr Szulczewski will step down as chief executive.
ContextLogic WISH, -7.10%, the parent company of e-commerce platform Wish, has struggled this year after an initial public offering late in 2020. In an earnings report Wednesday afternoon, the company revealed that third-quarter sales dove to $368 million from $606 million a year ago, and said that revenue in the fourth quarter would actually decline from that total despite the holidays.
Analysts on average had expected $372 million in third-quarter revenue and $469 million in the fourth quarter, according to FactSet, but Wish revealed that sales early in the quarter are trending poorly.
“Specifically, Q4 revenue through the end of October is down approximately 20% compared to our average monthly revenue in Q3 adjusted for a similar number of days,” the company disclosed in its report.
Wish did report a slightly smaller loss than analysts expected — $64 million, or 10 cents a share vs. average expectations for 13 cents a share. However, the smaller loss was credited to slashed ad spending, which was also blamed for the poor holiday forecast.
“From a financial perspective, we exceeded our bottom-line guidance range in part due to more efficient and reduced digital advertising spend,” Executive Chair Jacqueline Reses said in a statement included with the report.
Wish also announced that founder Szulczewski will step down as soon as a successor is found, or Feb. 1, 2022, whichever comes first. He will remain on the board of the company, which has engaged an executive search firm to find a new CEO.
“It has been an honor to found and lead Wish through its incredible growth as a private business and during its early days as a publicly traded company,” Szulczewski said in a statement. “My vision in creating Wish was to bring affordable and accessible goods to a consumer population that has been neglected by existing e-commerce offerings. I am so proud of what we have achieved so far, but we still have a long way to go.”
The stock gained in after-hours trading immediately following the announcements, but the retreated to a decline of roughly 1% after falling 7.1% to $5.10 in the regular session.
Wish stock was popular early in the year, but has fallen off along with its sales totals. Shares have declined 72% so far this year, as the S&P 500 index SPX, -0.82% has gained 24.7%.