Pinterest shares plunged as much as 20% after hours Thursday as CEO Bill Ready said the company "absorbed an exogenous shock this year related to tariffs" that affected top retail advertisers.
The company reported a fourth-quarter earnings miss, revenue that was roughly in line with expectations and issued weak guidance for the current period.
Here's how the company did, compared to analysts' consensus estimates from LSEG:
Earnings per share : 67 cents adjusted vs. 69 cents expected
: 67 cents adjusted vs. 69 cents expected Revenue: $1.32 billion vs. $1.33 billion expected
Ready told analysts on Thursday that the company is "not satisfied with our Q4 revenue performance, and believe it does not reflect what Pinterest can deliver over time."
The company's fourth-quarter sales rose 14% year-to-year. Net income for the fourth quarter came in at $277 million, down 85% from a year prior, when net income was $1.85 billion and included a deferred tax benefit.
This is the second quarter in a row in which Pinterest shed a fifth of its value after delivering Wall Street disappointing results. The impact of tariffs on large retailers "created a more meaningful headwind than we expected," Pinterest finance chief Julia Donnelly said on the call with analysts. Those retailers also pulled back on ad spend in Europe, she said.
The retail sector has been reeling from President Donald Trump's ongoing trade war, which raised the price of shipping costs. The trade war has also led to companies charging customers higher prices and reducing the number of products they can put on the market. Besides implementing layoffs, the retail sector also pulled back on advertising to deal with the ongoing trade issues.
Pinterest said it expects first-quarter sales to come in between $951 million to $971 million, trailing analyst estimates of $980 million.
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