MercadoLibre shares surge as locked-down consumers flock online

Shares of MercadoLibre Inc. jumped as Latin America’s largest e-commerce marketplace benefited from accelerating online sales in the region.

The Buenos Aires-based company’s net revenue reached US$652 million in the first quarter, beating analysts’ estimate of US$629 million. Gross merchandise and total payment volume jumped 34 percent and 82 percent on a yearly basis, respectively.

The stock soared as much as 25.3 percent in the United States, to an all-time high.

Despite the first few weeks of virus restrictions, MercadoLibre said gross merchandise volume growth accelerated to 73 percent in April.

“Consolidated April growth rates are above pre-Covid levels driven by Argentina, Chile, Colombia, and Mexico with Brazil still lagging somewhat,” Chief Financial Officer Pedro Arnt said on the earnings call Tuesday.

With the pandemic expected to reshape consumer habits and encourage online shopping, MercadoLibre has been calibrating investments and prioritising fast-growing items such as consumer packaged goods. According to Arnt, the company could see some virus-related costs to logistics, but supply chains in total haven’t suffered.

“Results and management’s comments about strong growth in April are likely to lead to upwards pressure on consensus revenue estimates,” Bradesco BBI analysts led by Richard Cathcart wrote in a report Tuesday.