Etsy’s latest financial report presented a complex narrative of resilience and challenge, sending its stock downward as investors grappled with the details. While the e-commerce platform demonstrated profitability strength, concerns over its core marketplace health were underscored by a significant leadership change.
The company announced that Chief Executive Officer Josh Silverman will be stepping down, to be succeeded by Chief Growth Officer Raina Moskowitz, effective after a transition period. This executive shift arrives at a pivotal moment as Etsy strives to rekindle growth in a post-pandemic landscape.
Financially, the third-quarter picture was divided. Etsy posted revenue of $678 million, a modest 2.4% annual increase that slightly surpassed Wall Street forecasts. The company’s earnings per share of $0.63 also handily beat estimates, with net income climbing 32% to $75.5 million, a figure bolstered by a one-time foreign exchange benefit. However, the most closely watched metric, Gross Merchandise Sales (GMS), revealed underlying pressure.
The total value of goods sold across Etsy’s platforms fell to $2.72 billion, a 6.5% decline that missed market expectations and signaled a contraction in marketplace activity.
This sales softness was further evidenced by a shrinking user base. The number of active buyers on Etsy fell approximately 5% year-over-year to 86.6 million, while the count of active sellers also dipped compared to the previous year.
These declines mark a continued trend for the artisan-focused marketplace as it contends with shifting consumer spending habits and intensified competition. In a statement, outgoing CEO Josh Silverman pointed to the “significant gross merchandise sales headwinds” but highlighted the company’s delivery of revenue growth and “very strong profitability” amid ongoing investments.
Wall Street’s reaction has been cautious, reflecting the uncertain path ahead. Etsy stock has significantly underperformed the broader market, down 32% over the past twelve months. The current analyst consensus largely positions Etsy as a “Hold,” with an average price target suggesting potential upside from current levels.
This guarded stance, exemplified by financial services firm Jefferies maintaining its Hold rating, indicates that the market is awaiting clearer signs of a sustainable GMS recovery and successful execution under new leadership before gaining renewed confidence in the stock’s trajectory.
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