E-commerce stocks slide after earnings largely disappoint; Amazon on deck

The broad e-commerce and online retail sector was sharply lower on Thursday after soft earnings reports from BigCommerce (BIGC), Etsy (NASDAQ:ETSY) and Wayfair (NYSE:W) offset a notable earnings beat from eBay. Wayfair (W) recorded a 2.2% decline in revenue during Q2 as repeat customers pulled back on orders. Etsy (ETSY) reported revenue increased 3.0% year-over-year and consolidated GMS was down 2.9%. Meanwhile, retail SaaS player BigCommerce (BIGC) set profit guidance below expectations. BigCommerce frequently moves in tandem with online retailers.

On Wall Street, Oppenheimer dropped Etsy (ETSY) to a Perform rating from Outperform. Analyst Jason Helfstein said the weaker Q3 guidance and removal of the full-year GMS outlook suggest no near-term visibility. “Separately, initiatives around gifting, seller classification, and mobile app focus will not impact FY24 results,” he warned.

Bank of America downgraded Wayfair (W) to Neutral from Buy. While Wayfair has been one of the strongest margin stories of the past two years through significant cost discipline and takeout, BofA thinks relative near-term margin expansion could be capped, due to there being less room for cost optimization, more pricing investments, and a lack of the revenue flow through on leverage required for the next stage of substantial margin expansion. The firm also warned that Wayfair (W) has some tough comparables ahead.

E-commerce movers: BigCommerce (BIGC) -14.0%, Etsy (ETSY) -9.4%, Wayfair (W) -8.6%, Stitch Fix (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) was down 2.2% ahead of the company’s highly anticipated earnings report.

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