Etsy (ETSY) is set to report its Q3 earnings after the market closes today, at the tail-end of a nightmare earnings season for tech.
Here’s what Wall Street’s expecting, compiled from Bloomberg:
Revenue: $563.6 million expected versus $532.4 million in Q3 2021
Earnings Per Share (EPS): 38 cents expected versus 62 cents in Q3 2021
Active Buyers: 95.5 million expected versus 95.98 million in Q3 2021
Wall Street’s also expecting the company’s Q4 revenue guidance to come in at $744.6 million.
Etsy shares were down about 50% year-to-date as of close Tuesday. The tech-heavy S&P 500, by comparison, is down about 20% year-to-date.
The e-commerce company saw years of pandemic growth, but has been hammered in the difficult macroeconomic environment that’s rattled Big Tech across-the-board.
Amazon’s (AMZN) results last week particularly don’t bode well for Etsy, Raymond James analyst Rick Patel wrote on Oct. 31. Amazon is an e-commerce “bellwether,” Patel wrote, and the company reported muted expectations for Q4, and by extension, the holiday season. The e-commerce giant guided to between $140 billion and $144 billion instead of the expected $155 billion.
So, since Amazon’s expecting a slower-than-ideal Q4, it’s hard to imagine the factors causing that deceleration also won’t slam Etsy.
“The deceleration was attributed to the impact of inflation, higher fuel prices and rising energy costs which have negatively impacted consumers and organizations,” Patel wrote. “AMZN noted that sales moderated as 3Q progressed across many of its segments, especially International stores. FX headwinds were also a factor.”
‘Leaning in and gaining share’
Etsy’s been all-in on the holidays, CEO Josh Silverman told Yahoo Finance Live in September.
“We’re investing more than $600 million in marketing this year to make sure that we’re front of mind with buyers at a time when they need us most,” said Silverman. “While a lot of other people might be pulling back, we think this is a great time to be leaning in and gaining share.”
Silverman added that he was expecting “pretty robust sales” looking towards Q3, adding that Etsy has retained the buyers and sellers it attracted in the pandemic.
“I would say that during the pandemic, people shopped on Etsy because they had to shop on Etsy,” he said. “What felt so great is people are coming back again and again now with limitless choice. They’re coming back because they want to shop on Etsy.”
Patel maintained an outperform rating on Etsy, expressing optimism about the company’s long-term “market share potential and a history of strong execution and margin expansion that we believe has room to continue.” Still, when it comes to the near-term, expectations should be “low,” he wrote.
Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks.
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