Etsy stock fell early Wednesday after the e-commerce site posted fourth-quarter results that missed sales estimates. The company also posted a decline in total merchandise sales for the holiday quarter, which it blamed on "significant" headwinds.
The New York-based e-commerce firm said early Wednesday that it earned an adjusted $1.03 per share on sales of $852 million. Analyst were projecting Etsy would post earnings of 93 cents per share on sales of $862 million, according to FactSet. Earnings increased 98% year-over-year while sales increased 1.2%.
Meanwhile, Etsy's gross merchandise value fell 6.8% year-over-year to $3.7 billion. The company pinned the decline on " a result of pressure on consumer discretionary product spending, challenging year-over-year comparisons in a shortened holiday season, category mix, and a highly promotional and competitive retail environment," through a news release.
On the stock market today, Etsy stock slipped 6% to 53.88 in recent premarket action. That points to the stock breaking below its 200-day, 50-day and 21-day moving averages.
Etsy Stock's Slump
Etsy's marketplace connects roughly 8 million independent sellers of mostly handcrafted items with about 95 million buyers, as of December. The company earns revenue from listing and transaction fees. It also sells advertising to sellers on the platform.
But both sides of Etsy's marketplace shrank last quarter. Total active sellers fell 10% year-over-year while active buyers decreased 1%. While its stock surged in 2021, Etsy has struggled since then as consumers have cut back on discretionary spending. Chief Executive Josh Silverman has previously called out increased competition from Amazon and Walmart, as well as lower-cost e-commerce sellers out of China such as Temu and Shein.
"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," Silverman said in a news release Wednesday.
Silverman said the company is focused on increasing buyer engagement by helping shoppers discover more items through Etsy. But Etsy still guided for a gross merchandise sales decline for its March quarter similar to Q4.
Technical Ratings For Etsy Stock
Not including Wednesday's early action, Etsy shares were up 12% so far in 2025. But stock remains well below highs near 307 it reached in late 2021.
Coming into the report, Etsy stock had an IBD Composite Rating of 69 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating of a stock's overall performance.
Further, Etsy's IBD Relative Strength Rating was 41 out of 99. The rating compares a stock's price movement over the last 52 weeks with that of others in IBD's database. The best stocks score 90 or higher.
