MercadoLibre (NASDAQ:MELI) grew third-quarter revenue 45% to about $10.8 billion, but operating income fell 6% to $676 million. Shares fell about 10% in early after-hours trading. The company is spending more on shipping, marketing, and credit even as its currency-neutral growth slowed for a fourth straight quarter. Each new dollar of sales now earns less profit than it did a year ago. Shipping did the most damage. MercadoLibre made free shipping easier to get in Brazil last year, so buyers now order cheaper items in smaller baskets. That brings in less revenue per package. The company also added almost 20% more warehouse space in one quarter, and new space costs money before orders fill it. Credit is the other drag. The company books expected losses the moment a card balance is drawn, but interest income arrives months later. So a fast-growing card book hurts profit today even if each group of borrowers pays off over time. Loan quality held steady, with 15- to 90-day late loans at 7% of the portfolio.
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