(Updated - May 2, 2024 5:28 AM EDT)
Etsy (NASDAQ:ETSY) saw its shares plummet over 13% in premarket trading Thursday after the company missed expectations on top and bottom lines in fiscal Q1 2024.
The e-commerce company posted Q1 earnings per share (EPS) of $0.48, slightly below the analyst estimate of $0.49. Revenue for the quarter was $645.95 million, narrowly missing the consensus estimate of $646.21 million.
The non-GAAP Adjusted EBITDA margin for the quarter stood at approximately 26.0%.
Consolidated Gross Merchandise Sales (GMS) totaled $3.0 billion, marking a decrease of 3.7% year-over-year and a 4.1% drop on a currency-neutral basis.
For Q2 2024, Etsy anticipates the year-over-year decline in consolidated GMS to mirror the Q1 2024 performance, with potential outcomes ranging from a mid-single-digit decline to a low single-digit decline at the higher end.
Looking forward to FY 2024, Etsy expects a slight acceleration in year-over-year consolidated GMS growth in the latter half of the year.
The company also projects revenue growth to surpass GMS growth, with the full-year take-rate expected to meet or exceed current levels.
Furthermore, Etsy aims to sustain robust profit margins, anticipating consolidated Adjusted EBITDA margins for 2024 to be at least equivalent to those of 2023.
"Our first quarter performance, while in line with our guidance, was pressured by the challenging environment for consumer discretionary products, which continues to be a headwind to Etsy marketplace growth," said Josh Silverman, Etsy, Inc. Chief Executive Officer.
"That said, we are encouraged by the meaningful progress we have made to improve customer experiences that we expect will drive buyer consideration and frequency over time, and we are working with focus and urgency to set the foundation to reignite Etsy marketplace growth.”
Commenting on the report, Goldman Sachs analysts said Etsy's latest print showed a "lack of acceleration," leaving the company's 2024 GMS trajectory as a key debate going forward.
"We come away from these results with a lower confidence interval on the progression of demand trends over the next few quarters as the range of outcomes for 2024 topline remains wide and we expect that investors will remain focused on the quarterly cadence of GMS as the main fundamental KPI impacting near-term stock performance," analysts wrote.
In turn, Goldman slashed its price target on the stock from $80 to $70, while maintaining a Neutral rating.
Meanwhile, KeyBanc analysts said they view Etsy's execution against the current environment as positive, though they remain on the sidelines, awaiting "a more stable backdrop to become constructive."