Etsy’s company logo seen at its headquarters in New York City on December 13, 2023.
Michael M. Santiago | Getty Images
Etsy Shares soared Thursday after the company announced plans to offload its fashion resale app Depop to other companies. eBay Approximately $1.2 billion in cash.
The online marketplace also reported mixed results in the fourth quarter.
Here’s how Etsy has performed compared to estimates from analysts surveyed by LSEG:
Earnings per share: 92 cents vs. estimated 84 cents Revenue: $882 million vs. estimated $885 million
Total merchandise sales, or the dollar value of goods sold, fell 3.8% from a year earlier to $3.59 billion, below analysts’ expectations of $3.6 billion, according to FactSet. The company attributed the decline in annual sales to the sale of its musical instrument market, Reverb, which was completed in June of last year.
The lackluster performance was overshadowed by the deal with Depop announced Wednesday. Etsy CEO Kurti Patel Goyal said in a statement that the sale will allow the company to “exclusively focus” on its core markets.
eBay said its resale app Depop, popular among young consumers, will complement its business and strengthen its presence in fashion, which has become one of its fastest-growing categories.
eBay stock also rose on Thursday.
Etsy and eBay 1-day stock price chart.
Etsy’s net income for the fourth quarter was $110.7 million, or 92 cents per share, down 14.8% year over year, compared to $129.9 million, or $1.03 per share, a year ago.
The company, known for its marketplace of handmade and artisanal products, has recently ramped up its marketing investments with the goal of reaching more U.S. consumers.
Etsy has struggled against a difficult macroeconomic backdrop as well as increased competition in online retail. The company said in its annual report released Thursday that it is under pressure from continued pullbacks in consumer discretionary spending and “evolving buyer behavior.”
The number of active sellers increased 7.7% year-on-year to 8.76 million, exceeding analysts’ expectations of 8.5 million. The number of active buyers fell 2% year over year to 93.54 million, compared to Wall Street estimates of 93.1 million.
Etsy expected first-quarter total merchandise sales to be between $2.38 billion and $2.43 billion. That compares to $2.8 billion in GMS a year ago. Analysts had expected GMS to sell for $2.68 billion.
