Etsy Inc. reported its fourth-quarter earnings, revealing a revenue of $852.2 million, which fell short of Wall Street's expectations of $862.8 million. The company's gross merchandise sales (GMS) also missed estimates, coming in at $3.7 billion, down 6.8% year-over-year, compared to the anticipated $3.8 billion. Despite the revenue miss, Etsy's earnings per share (EPS) of $1.03 surpassed the consensus estimate of $0.93. The company attributed the GMS decline to pressures on consumer discretionary spending, a shortened holiday shopping season, and a competitive retail environment, particularly from Chinese online retailers Temu, Shein, and TikTok Shop. Etsy's stock experienced a significant drop of over 9% in morning trading following the announcement. The company provided a cautious outlook for the first quarter, expecting GMS to decline at a similar rate as the fourth quarter. Net income for the quarter was $129.9 million, up from $83.2 million, or 70 cents per share, a year ago. Etsy's CEO, Josh Silverman, emphasized the company's focus on improving the quality of goods and shopping experience, which has led to short-term GMS losses but is aimed at building a stronger foundation for future growth. Etsy anticipates an adjusted EBITDA margin of 25-26% for the first quarter, focusing on its core market of artisan and handcrafted goods.