(Reuters) - Block XYZ.N cut its profit forecast for 2025 and missed estimates for quarterly earnings on Thursday as the payments firm grapples with muted consumer spending, sending its shares down 19% in extended trading.

President Donald Trump's trade policies have sparked concerns over consumer spending, which makes up more than two-thirds of U.S. economic activity, as well as fears of stagflation.

"We are operating in a more dynamic macro environment, so we have reflected a more cautious stance on the macro outlook into our guidance for the rest of the year," the company said.

The Jack Dorsey-led firm cut its forecast for 2025 gross profit growth to 12% from 15%, while projecting second-quarter gross profit at $2.45 billion, below Wall Street estimates of $2.54 billion.

Its Cash App, which enables peer-to-peer mobile payments, reported gross profit growth of about 10% in the first-quarter ended March 31, down from 25% last year.

"Non-discretionary Cash App Card spend in areas like grocery and gas was more resilient, while we saw a more pronounced impact to discretionary spending in areas like travel and media," Chief Financial Officer Amrita Ahuja said on a post-earnings call.

Block also reported a 60% drop in its first-quarter profit as it recorded a $93.4 million remeasurement loss on its bitcoin investments, compared to a $233.4 million similar gain in the year-ago period.

On an adjusted basis, profit came in at 56 cents per share, well below analysts' expectations of 87 cents, according to data compiled by LSEG.

Block facilitates bitcoin purchases on its platform by acquiring the cryptocurrency through private broker dealers and reselling it at a small premium.

Bitcoin revenue fell 15.7% to $2.30 billion in the quarter ended March 31, as a wider market downturn saw the cryptocurrency decline 12% in the first quarter.

The fintech reported transaction-based revenue of $1.55 billion, missing expectations of $1.59 billion.