Etsy (NASDAQ: $ETSY) is a leading American e-commerce company primarily focused on handmade, vintage, and crafted items. They have categories for furniture, bags, décor, art, toys, and other crafted items and tools. Etsy provides a platform for artisans and creators to connect with buyers who appreciate their unique offerings globally.
On February 21, 2024, Etsy, Inch. reported its fourth-quarter results for the year ending December 31, 2023.
Fourth Quarter and Full-Year Results
Brooklyn-based Etsy reported an ESP of $0.62 for the fourth quarter ending December 31, 2023, below Wall Street analysts’ forecast of $0.77 per share. According to a FactSet survey, the company
The consolidated revenue generated by the company is up by 4.3% Y/Y, totaling $842.3 million, exceeding estimates of $828 million. Moreover, consolidated net income amounted to $83.3 million, marking a 24.0% decline year-over-year, primarily attributed to restructuring and other exit costs totaling $27 million in the fourth quarter.
Furthermore, the overall net income margin was also down by about 10% and approximately 400 basis points Y/Y. The consolidated Gross Merchandise Sales (GMS) was $4.0 billion, down by 0.7% on a Y/Y basis in the fourth quarter. The GMS per active buyer on a trailing twelve-month basis decreased by 4% year-over-year to $126 in the fourth quarter.
The company’s GMS is down by 1.2%, totaling $13.1 million, compared to the GMS of $13.3 million in fiscal 2022.
Active buyers increased by 1.5 % in 2023 compared to the previous year. The net loss for fiscal 2022 was primarily impacted by a $1.0 billion impairment charge related to the assets of Depop and Elo7.
CEO Statements
The CEO of Etsy, Josh Silverman, said, “Etsy delivered over $13 billion in consolidated GMS and our highest-ever annual revenue.”
He added, “We’ve built an ambitious plan to invest in a portfolio of growth initiatives in 2024, starting with efforts to make Etsy an indispensable partner for Gifting. We recently launched Gift ModeTM, an interactive hub for gifting that combines AI and human curation to help shoppers find the perfect present — just the beginning of our bold plans to drive buyer consideration and frequency. We start the year energized – with the right team, a highly relevant and differentiated Right to Win strategy, a disciplined investment approach, and a resilient business model.”
Q1 And Full-Year Guidance
Etsy reports that GMS is forecasted to decline “in the low-single-digit range” for the first quarter ending in March. The company said that this reflects the slow start of the quarter. The e-commerce giant anticipates growth in 2024 and expects the GMS to grow each quarter sequentially.
Additionally, they expect to maintain a high margin for 2024 with consolidated adjusted EBITDA similar to 2023. Although, the adjusted EBITDA is estimated to be approximately 26% for this quarter.
Stock Update: ETSY
$ETSY is trading at $70.61, down by 8.61% during the afternoon session on February 22, 2024. Moreover, Etsy stock also slumped by 32% in value last year, following a 45% loss in 2022. At the time of writing, the market cap is around 8.479 billion, with a trading volume of 8,320,785.
Should you Invest in ETSY?
Etsy is one of the pioneers in the e-commerce sector, and the recent stock decline could be temporary. However, the company expects a slow start for 2024 and good growth at the end of the year.
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