Why Is Online Marketplace For Handmade Items Etsy Stock Falling Today?
Portfolio Pulse from Vandana Singh
Etsy Inc (NASDAQ:ETSY) is laying off about 11% of its workforce, affecting 225 employees, due to a slowdown in consumer spending and increased competition. The company expects to incur $25-$30 million in charges, primarily in Q4 2023. Etsy anticipates a 1-2% decline in Q4 FY23 gross merchandise sales year-over-year, but a 2-3% increase in revenue and an adjusted EBITDA margin of 27%-28%. Etsy's CEO acknowledges the challenging environment and the need for adjustments. The company also announced the departure of CMO Ryan Scott and the appointment of Raina Moskowitz as COO and CMO. Etsy's shares fell 5.19% following the news.
December 13, 2023 | 5:47 pm
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Etsy is reducing its workforce by 11%, incurring charges of $25-$30 million, and experiencing a slight decline in gross merchandise sales but a slight increase in revenue. The stock dropped 5.19% after the announcement.
The layoffs and the associated restructuring charges signal cost-cutting measures due to a challenging economic environment, which typically concerns investors about the company's near-term prospects. The slight decline in gross merchandise sales indicates a potential slowdown in business, while the increase in revenue and adjusted EBITDA margin may not be sufficient to offset investor concerns in the short term. The departure of the CMO could also lead to uncertainty about the company's marketing strategy moving forward.
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IMPORTANCE 90
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