Etsy Inc. (ETSY), the popular online marketplace for handcrafted and vintage items, witnessed a significant plummet of 9.42% in its stock price during the pre-market trading session on Wednesday, February 19, 2025. The sell-off was triggered by the company's weaker-than-expected financial performance for the fourth quarter of 2024, particularly in terms of revenue and gross merchandise sales (GMS).

According to the earnings report, Etsy's revenue for the holiday quarter rose by only 1.2% year-over-year to $852.2 million, missing Wall Street's estimates of $862.8 million. The company also fell short of analysts' expectations for GMS, which reflects the total dollar value of items sold across all Etsy-owned platforms. Etsy's consolidated GMS declined by 6.8% year-over-year to $3.74 billion, compared to forecasts of $3.88 billion.

The disappointing results were attributed to several factors, including weak consumer spending on gifts and handcrafted goods during the holiday season, pressure on discretionary spending amid a highly competitive and promotional retail environment, and challenging year-over-year comparisons due to a shortened holiday season. Additionally, Etsy reported a decline in active buyers and GMS, reflecting the overall headwinds faced by the company's e-commerce platform.