(Reuters) – MercadoLibre Inc posted a larger loss for the first quarter on Wednesday, hit by lower margins as the Argentine e-commerce giant boosts spending to respond to a surge in online shopping and digital payments in Latin America.
The company has been increasing investment in key areas, such as warehouses and fintech services, as it battles competitors including Amazon.com Inc in a rapidly growing market in which many shoppers are still unaccustomed to spending money online.
Its gross profit margin shrunk to 42.9% in the quarter ended March 31, from 48% a year earlier.
The company’s net loss widened more than 61% to $34 million, or 68 cents per share, from a year earlier.
Quarterly revenue more than doubled to $1.4 billion. Analysts on average had expected revenue of $1.14 billion, according to IBES data from Refinitiv.
The second wave of COVID-19 that has hammered Brazil, which comprised 56% of MercadoLibre’s total revenue, has sustained a surge in online shopping and digital payments in the region and neighboring countries including Argentina.
Total payment volume from its fintech arm Mercado Pago rose 81.8% to $14.7 billion as the company revs up its digital payments engine with many shops shifting online during the pandemic.
(Reporting by Chavi Mehta in Bengaluru and Aluisio Alves in Sao Paulo; Editing by Christian Plumb and Aditya Soni)
