Etsy Stock Drops After Mixed Q4 Results, Weak Guidance

Etsy Inc. ETSY reported mixed fourth-quarter financial results after the bell on Wednesday. Here's a look at the details.

The Details: Etsy reported quarterly earnings of 62 cents per share which missed the analyst consensus estimate of 78 cents by 20.51%.

The company reported quarterly sales of $842.3 million, beating the analyst consensus estimate of $827.81 million by 1.75% and representing a 4.34% increase over sales of $807.24 million from the same period last year.

“Etsy delivered over $13 billion in consolidated GMS and our highest-ever annual revenue,” said Josh Silverman, Etsy’s CEO. “We’ve built an ambitious plan to invest in a portfolio of growth initiatives in 2024, starting with efforts to make Etsy an indispensable partner for Gifting.”

“We recently launched Gift ModeTM, an interactive hub for gifting that combines AI and human curation to help shoppers find the perfect present — just the beginning of our bold plans to drive buyer consideration and frequency,” added Silverman.

Outlook: Etsy saw GMS for the first quarter of 2024 declining in the low-single-digit range on a year-over-year basis. The company said the guidance reflected its slow start to the quarter and its expectation that GMS for the core Etsy marketplace improves later in the quarter. Etsy added that if trends fail to improve as it currently believed, it could become a mid-single-digit decline.

Etsy expects the first quarter to be the low point in year-over-year growth in GMS and revenue as the benefits of our Etsy marketplace product and marketing investments kick in starting in the second quarter. Etsy noted consolidated adjusted EBITDA margins for 2024 at least similar to 2023.

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ETSY Price Action: According to Benzinga Pro, Etsy shares are trading down 5.81% after-hours at $72.65 at the time of publication.

Image: Courtesy of Etsy, Inc.