Etsy Falls on Missed Q4 Estimates Amid Weak Spending
Etsy (ETSY) underperformed Wall Street expectations for the holiday quarter's revenue and gross merchandise sales (GMS). Gift and handmade goods consumption declined, leading to a 4% premarket stock drop on Wednesday.
Sluggish consumer spending, coupled with fierce competition from Amazon and Temu, eroded Etsy's revenue. Despite a slight increase in overall spending, demand for furniture and home decor products softened as consumers prioritized necessities.
Etsy's GMS reached $3.74 billion in the quarter ended December 31, falling short of analysts' projections of $3.88 billion. Revenue stood at $852.2 million, below expectations of $862.8 million.
The company anticipates a 6.8% year-over-year decline in Q1 GMS, similar to the last quarter. Despite weaker sales, Etsy exceeded earnings expectations, reporting $1.03 per share against a consensus of 93 cents.