Fading pandemic benefits are hitting e-commerce stocks hard. Yesterday’s reported earnings from Shopify (NASDAQ:SHOP) and Wix (NASDAQ:WIX) sent their stocks down 16% and 23%.

What’s the big deal? The COVID after-effect first hit work-from-home stocks like Zoom and Peloton — now making its way to e-commerce.

After rising 237% between 2020-2021, Shopify — the e-commerce software provider — is down 56%. In its latest earnings report, Shopify:

• Report: $1.38B in sales (41% growth), $1.36 earnings per share — beating $1.30 forecasts.
• Outlook: Expects growth to fall below 2021’s 57%.

Shopify’s CFO is concerned about higher inflation and lower consumer demand impacting e-commerce sales. Per Scott Kessler of Third Bridge (via Barrons), investors are focused on two things:

• Whether e-commerce can maintain momentum as the world opens.
• Shopify’s heavy investments into its fulfillment center business.

Shopify is trying to compete with Amazon and bigger retailers — with its own network of distribution centers to provide faster shipping and better logistics.

But an investment of this size has considerable risk and could take years to build out.

Double whammy: Wix, the website builder, reported even worse results that missed sales expectations. The outlook for the entire e-commerce sector is grim…

• The ProShares Online Retail ETF (NYSE:ONLN) is down 46% since peaking nearly a year ago.
• SquareSpace (NYSE:SQSP), an e-commerce-focused website builder, doesn’t even report earnings until Mar. 7 — yet it fell 20% yesterday.