Pinterest Shares Tumble After Earnings Miss, Citing Tariff Impact

Shares of Pinterest fell sharply Friday, closing down nearly 17%, after the company reported fourth-quarter results that fell short of Wall Street's expectations. The social media platform pointed directly to tariffs as a primary cause for the earnings disappointment.

Pinterest posted revenue of $1.32 billion for the quarter, slightly below analyst forecasts. More strikingly, net income dropped to $277 million, an 85% decline from the $1.85 billion reported a year earlier. The company also issued first-quarter sales guidance that was softer than anticipated.

In a statement, CEO Bill Ready said Pinterest absorbed a significant external shock this year related to tariffs, which particularly affected advertising spending from major retail clients. The company's financial performance, according to analysts at Goldman Sachs, is likely to face continued pressure in the near term from these macroeconomic challenges, including tariffs and shifts in consumer spending.

This pressure comes as Pinterest undergoes a significant internal shift. In January, the company announced workforce reductions affecting less than 15% of employees and a scaling back of office space. Management stated it is reallocating these resources toward teams focused on artificial intelligence, aiming to prioritize new AI-driven products.

Despite the immediate financial strain, the company's user base continues to expand robustly. Pinterest reported 619 million global monthly active users in Q4, a 12% annual increase and an all-time high, with notable strength among Gen Z users. Analysts acknowledge these near-term headwinds but note management's confidence in a long-term strategy built on advertiser diversification and automation.

Citing reduced visibility from key advertisers partly due to tariffs, Citi analysts downgraded Pinterest's stock from Buy to Neutral on Friday.

Source: CNBC