Etsy posts mixed Q4 results
Etsy (ETSY) posted mixed fourth quarter results after the market close on Wednesday. The e-commerce company reported earnings of $0.62 per share compared to estimates of $0.78. Revenue, however, was better than expected, $842.3 million versus the Street's estimate of $827.3 million. Gross merchandise sales of $4.01 billion was about in line with expectations.
Yahoo Finance's Josh Lipton and Julie Hyman break the report down.
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Editor's note: This article was written by Stephanie Mikulich.
Video Transcript
JOSH LIPTON: Etsy comes in, bottom line EPS $0.62. That's a miss. The Street was at $0.78. Revenue though $842.3 million. The Street was at $827 million. Looking ahead though, they are calling for Q1 adjusted EBITDA margins. They were looking for 26%. The Street was close to 27.3%. So maybe not surprised here, Julie. At least, initially, we're seeing a reaction to the downside in the after hours.
JULIE HYMAN: Yeah. And if you look at the gross merchandise sales, that is the amount of sales that moved through the site, we're talking about $4 billion in the fourth quarter. That is a decline of 7/10 of a percent year-over-year or currency neutral down by 1.6%. So that's an interesting number as well. They did say that the gross merchandise sales accelerated during the holiday season, that they did rise there. But if you look at all of the fourth quarter, you saw that decline.
Just looking at some of the other commentary here, the company making significant product, and marketing investments is said to support that holiday period. Of course, Etsy is also under pressure from the activists over at Elliott Management, which reportedly have built what about a 13% stake in the company. We don't know yet what specifically they're looking to change at Etsy, but certainly, you would imagine they want to change reactions in the stock like this, where you see it down by 4%.
JOSH LIPTON: No, it's-- it's a big question now that Elliott's involved with Etsy's board, which was described and thought it was amicable, but I think that is a key question here is what kind of operational changes could be coming now with that change, for sure.
