Etsy disappoints with Q4 sales miss, shares drop

(Sharecast News) - Shares in American ecommerce marketplace Etsy fell sharply on Wednesday as sales over the key holiday-shopping season missed the mark, though profits came in higher than forecasts. Gross merchandise sales (GMS) were down 6.8% year-on-year at $3.7bn in the fourth quarter of 2024, though consolidated revenues edged 1.2% higher to a record $852m due to a strong advertising performance.

This was still below the $863m expected by the market, causing the stock to tank 7.2% to $53.17 in pre-market trade on Wall Street.

Consolidated net income was 56% higher than the year before at $130m as a result of significant restructuring and other costs recognised in 2023. Diluted net income per share was $1.03, coming in ahead of the $0.94 expected.

For 2024 as a whole, GMS fell 4.4% to $12.59bn with the number of active sellers falling 10% and active buyers slipping 1.1%. However, group revenues were up 2.2% at $2.81bn. Net income fell 1.4% to $303m.

"Despite facing significant GMS headwinds in 2024, we are proud to have delivered year-over-year revenue growth and very strong profitability, while simultaneously investing in our future," said chief executive Josh Silverman.

Looking ahead, the company pointed to a decline in first-quarter GMS similar to the fourth quarter, but said it should be in a position to improve GMS performance later in the year.

"Foundational improvements in the Etsy marketplace, particularly in quality, reliability, and in making our app a place for discovery, are already enhancing customer experiences - which we believe will further differentiate the Etsy experience, driving consideration and purchase frequency as we work to get back to GMS growth."