Etsy Stock Suffers Post-Earnings Dip

Etsy (NASDAQ:ETSY) is a Brooklyn-based company that operates two-sided online marketplaces that connect buyers and sellers in the United States, Canada, the United Kingdom, Germany, France, and Australia. Its shares were down 2.38% in mid-morning trading on Monday,

February 26, 2024. The stock has dropped 4.22% week-over-week, coming after the release of its final batch of fiscal 2023 earnings. What is behind this decline? Should investors be down on Etsy at this stage? Let’s jump in.

This company released its Q4 and full-year fiscal 2023 earnings on February 21, 2024. In Q4 2023, Etsy reported consolidated Gross Merchandise Sales (GMS) of $4.0 billion, which was down 0.7% compared to the previous year. Meanwhile, Etsy marketplace GMS declined 1.4% year-over-year to $3.6 billion. However, that was up 142% on a 4-year basis. Active buyers reached a new all-time high of 92 million – up 3% compared to the prior year.

Consolidated revenue for Etsy reached a record $842 million – up 4.3% compared to Q4 FY2022. Meanwhile, consolidated net income plunged 24% year-over-year to $83.3 million.

For the full-year, Etsy delivered total revenue of $2.74 billion – up from $2.56 billion in FY2023. Moreover, gross profit rose to $1.91 billion compared to $1.82 billion and Etsy posted net income of $307 million compared to a net loss of $694 million in the previous year.

Looking ahead to the first quarter of fiscal 2024, Etsy expects GMS to decline in the low-single-digit range. For the full year, Etsy expects revenue growth to outpace GMS growth. The company is also projecting “very healthy margins” and consolidated adjusted EBITDA margins that are comparable to the 2023 fiscal year.

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