According to CNBC, Pinterest shares plummeted 20% on Wednesday after the company reported weaker-than-expected third-quarter earnings. The social platform posted adjusted earnings of 38 cents per share, missing analyst expectations of 42 cents per share, though revenue did hit the $1.05 billion estimate. U.S. and Canada sales came in at $786 million, below the projected $799 million, with CFO Julia Donnelly pointing to “pockets of moderating ad spend” from larger retailers facing tariff pressures. RBC analysts noted this marks the first time tariff-related weakness has appeared in their digital ads analysis, highlighting Pinterest’s sensitivity to macroeconomic conditions.
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The tariff problem isn’t going away
Here’s the thing about tariffs – they’re not a one-quarter issue. Donnelly explicitly warned that these trends will continue, especially with new tariffs hitting the home furnishings category. That’s particularly bad news for Pinterest, which has always been strong in home decor and DIY content. When your core advertisers in a key vertical are getting squeezed, that’s going to show up in your numbers quarter after quarter.
This exposes Pinterest’s fundamental challenges
Look, the tariff issue is real, but it’s also highlighting some deeper problems. Pinterest has always struggled with customer concentration – they’re heavily reliant on larger retailers who can pull back spending when times get tough. And let’s be honest, the competition from Instagram and TikTok isn’t getting any easier. Those platforms are eating into everyone’s ad budgets, and Pinterest doesn’t have the same scale or engagement to compete effectively.
Where does Pinterest go from here?
Analysts are clearly worried, with several banks cutting price targets despite 81% maintaining buy ratings. The international growth story that investors were counting on? Citi’s Ronald Josey thinks it could “plateau or decelerate faster than expected.” Basically, if the U.S. market is struggling and international growth slows down, what’s left? Pinterest needs to diversify its advertiser base and find new revenue streams, but that’s easier said than done when you’re fighting giants for every advertising dollar.
