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Pandemic-favorite Etsy beats revenue estimates on demand for bags, gifts
Published Feb 22, 2023 04:17PM ET
Updated Feb 22, 2023 06:51PM ET
© Reuters. FILE PHOTO: A sign advertising the online seller Etsy Inc. is seen outside the Nasdaq market site in Times Square following Etsy's initial public offering (IPO) on the Nasdaq in New York April 16, 2015. REUTERS/Mike Segar/File Photo
By Granth Vanaik
(Reuters) -Etsy Inc on Wednesday beat estimates for quarterly revenue on steady demand for bags, party products and personalized gifts on its online marketplace, sending the company's shares up more than 5% in extended trading.
The company, a platform for sellers of handmade or vintage items, has remained popular with cost-conscious consumers after a pandemic-led spurt in growth when people shopped for cloth masks and craft supplies.
"Shoppers are coming to us more frequently and spending more with Etsy (NASDAQ:ETSY)," said Chief Executive Officer Joshua Silverman on a post-earnings call, adding the company is continuing to build the "Etsy habit."
Net revenue in the quarter ended Dec. 31 jumped 12.6% to $807.2 million for Etsy, compared with analysts' expectation of $751.8 million, according to Refinitiv.
"Despite concerns about weaker consumer discretionary spending as well as the shift in consumer spending to services over goods, ETSY produced strong revenue growth and better-than-expected gross merchandise sales (GMS (NYSE:GMS))," said Arun Sundaram, analyst at CFRA Research.
Still, GMS, a key industry metric, fell 4% to $4 billion in the reported quarter from a year earlier as spending on non-essential items slowed under the threat of a recession. For the current quarter ending March, Etsy expects GMS to be in the range of $2.95 billion to $3.15 billion.
The company forecast revenue between $600 million and $640 million for the January-March period, compared with analysts' expectation of $621.6 million.
Last week, short seller Citron Research alleged that Etsy had become one of the largest platforms in the world for counterfeit goods, sending its shares down more than 8%.
Etsy, in response, had said that counterfeit items were prohibited on the platform.
CEO Silverman on Wednesday offered more defense against the allegations on a post-earnings call, detailing investments and safety measures to keep fraud sellers off the platform.
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