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Wayfair Sees More Strength Ahead, While Etsy Forecasts Tougher Times

Stock MarketsMay 06, 2021 11:42AM ET
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© Reuters.

By Christiana Sciaudone

Investing.com -- It's a tale of two online retailers. 

Wayfair (NYSE:W) forecasts a second quarter even better than the first, which blasted expectations, while Etsy (NASDAQ:ETSY) expects sales to decelerate. The furniture retailer rose almost 5% and the crafter's platform fell 14%.

Home sales, though they have slowed recently on a shortage of inventory, have soared throughout the pandemic on low interest rates and an exodus from urban lifestyles. That -- alongside homeowners who are upgrading their spaces -- has helped demand for Wayfair products jump. 

Our free time in which to craft items and sell and buy them, however, is shifting to the outside world as we get jabs against Covid-19 and look to spend our pent-up savings on beach holidays rather than trinkets. That's bad news for Etsy, which has seen revenue and profit over the past 12 months higher than ever. 

"We currently expect Q2 2021 [gross merchandise sales] to decelerate along with the rest of e-commerce as we lap the tremendous 2020 growth rates," Etsy Chief Executive Officer Josh Silverman said in a statement. 

Meanwhile, Wayfair Chief Financial Officer Michael Fleisher had a different message for investors.

"Q2 should clearly demonstrate our ability to remain strongly profitable even while continuing our ongoing ambitious investments and while comparing against an extraordinary period last year," Fleisher said on an earnings call today. "We believe Q2 net revenue will be higher than Q1 net revenue and Q2 adjusted EBITDA will be at or above Q1 levels. And we expect to be strongly profitable every quarter of 2021."

Stifel analyst Scott W. Devitt lowered the price target on Etsy noting that "the company now has to execute against a more challenging backdrop given difficult compares (146% y/y GMS (NYSE:GMS) growth in 2Q:20), declining mask sales (14% of 2Q:20 GMS), and expectations for normalizing consumer behavior as vaccination rates rise in the company’s key markets," according to StreetInsider.  

 

Wayfair Sees More Strength Ahead, While Etsy Forecasts Tougher Times
 

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