Etsy Inc.’s stock took an initial hit, falling 8% in extended trading following the company's recent fiscal report. The online marketplace reported a net income of $83.3 million for the fourth quarter, down from $109.5 million in the same period last year. Despite a 4% rise in revenue to $842.3 million, the results fell short of analysts' expectations.
Soft Start to Fiscal Year
Executives at Etsy cautioned about a soft start to the fiscal year, with an estimated decline in Gross Merchandise Sales (GMS) for the first quarter. While first-quarter revenue may be slow initially, they anticipate improvement as the quarter progresses due to planned investments in products and marketing.
If the current trends do not improve as expected, there could be a mid-single-digit decline in GMS. As of now, analysts are forecasting $654 million in revenue for the first quarter.
Market Performance
Etsy's shares have experienced a 40% decline this year, contrasting with the 25% increase in the broader S&P 500 index. Despite the challenges faced in the beginning of the fiscal year, Etsy remains optimistic about potential improvements in the coming months.
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