- Etsy Inc. (ETSY) shares dropped nearly 10% in early trading after Q4 results showed a revenue miss at $852.16 million against the $861.6 million expected, despite beating EPS estimates by $0.11 to $1.03.
- The company reported declines in active buyers by 2.6% to 89.6 million and a 3.5% decrease in GMS per active buyer to $121, with overall Etsy marketplace GMS down 8.6% to $3.3 billion due to lower consumer discretionary spending.
- Consolidated net income rose 56% to $129.9 million, aided by previous year’s restructuring costs, but the broader market challenges led to a 6.8% drop in consolidated GMS to $3.7 billion.
Etsy Inc. (ETSY) saw its stock dip by $5.51 or 9.67% to $51.77 in early Wednesday trading following the release of its Q4 and full-year financial results for 2024. Despite beating earnings expectations with an adjusted EPS of $1.03, surpassing the consensus estimate by $0.11, the company fell short on revenue, reporting $852.16 million against the expected $861.6 million. This revenue miss was accompanied by a decrease in active buyers by 2.6% to 89.6 million and a drop in gross merchandise sales (GMS) per active buyer by 3.5% to $121 over the past year, reflecting a broader contraction in consumer discretionary spending.
The Etsy marketplace experienced a significant downturn with GMS falling 8.6% year-over-year to $3.3 billion, attributed to a combination of factors including a shortened holiday shopping season, changes in product category mix, and a fiercely competitive retail environment where promotions were rampant. Consolidated GMS for Etsy was down 6.8% to $3.7 billion, with similar declines on a currency-neutral basis, signaling that these challenges were not just domestic but global.
However, not all was negative as Etsy managed to report a 56% increase in consolidated net income to $129.9 million, partly due to $27 million in restructuring and exit costs from the previous year, suggesting some positive financial management and cost control measures. Despite these efforts, the significant drop in key performance indicators like buyer activity and sales volume underscores the pressures faced by Etsy in a market increasingly crowded with alternatives for unique and handmade goods, where consumer behavior is shifting towards more essential purchases amidst economic uncertainty.
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