E-commerce stocks fall after earnings disappointment; Amazon on board

The broad e-commerce and online retail sector fell sharply on Thursday after weak earnings reports from BigCommerce (BIGC), Etsy (NASDAQ:ETSY) and Wayfair (NYSE:W) offset a noticeable beat in earnings by eBay. Wayfair (W) saw revenue drop 2.2% in the second quarter as returning customers withdrew from placing orders. Etsy (ETSY) reported a 3.0% year-over-year revenue increase, while consolidated GMS fell 2.9%. Meanwhile, retail SaaS company BigCommerce (BIG) set profit forecasts below expectations. BigCommerce often works in tandem with online retailers.

On Wall Street, Oppenheimer downgraded Etsy (ETSY) from Outperform to Perform. Analyst Jason Helfstein said the weaker Q3 guidance and the removal of GMS’s full-year guidance suggested a lack of near-term visibility. “The gifting initiatives, seller classification, and mobile app focus will not impact FY24 results individually,” he warned.

Bank of America downgraded Wayfair (W) from Buy to Neutral. While Wayfair has been one of the strongest margin stories of the past two years thanks to significant cost discipline and acquisitions, BofA believes that near-term relative margin expansion may be limited due to reduced headroom for cost optimization, higher pricing investments, and a lack of leveraged revenue flow required for the next stage of significant margin expansion. The company also cautioned that Wayfair (W) faces challenging comparisons.

E-commerce moving companies: BigCommerce (BIGC) -14.0%Etsy (ETSY) -9.4%Wayfair (W) -8.6%Stitch Repair (SFIX) -7.5%Beyond (BYON) -6.4%Shopify (SHOP) -5.8%Revolve Group (RVLV) -4.9%MercadoLibre (MELI) -4.4%ThredUp (TDUP) -3.8%and Chewy (CHWY) -3.5%Maplebear (CART) -3.5%E-commerce giant Amazon (AMZN) has seen a decline 2.2% ahead of the company’s long-awaited earnings report.

Amplify Online Retail ETF (NYSEARCA:BUY) was down 4.25%.