(Reuters) -Online marketplace Etsy beat Wall Street estimates for first-quarter revenue on Wednesday, signaling steady demand for gifts and handcrafted goods as well as its resale apparel platform, Depop.
Consumers turned to the e-commerce platform to buy items ranging from demi-fine jewelry to decor during the quarter, boosting Etsy’s sales at a time when the broader retail industry geared up for a slowdown due to tariff-led uncertainty.
President Donald Trump’s sweeping tariffs on import goods from countries including Canada and China have risked the living costs of U.S. consumers going up as companies battle the likelihood of higher production prices.
Etsy is largely shielded from such tariffs as most of its products are purchased locally or sourced from Europe.
However, any new levies on goods from the European Union could push prices up for the company.
Shares of the company were up nearly 1% in premarket trading following the results.
Etsy had said earlier in April it was selling its musical instrument marketplace, Reverb, and the transaction is expected to close in the coming months.
This resulted in the company recording quarterly net loss of $52.1 million, or 49 cents, compared with profit of $63 million, or 48 cents, a year earlier. Etsy said this reflects an impairment charge of $101.7 million to the goodwill of Reverb.
Brokerage Bernstein noted that focusing on the core business at this juncture is probably the right call for the company, which is in need of getting the gross merchandise sales (GMS) growth back on track.
Etsy’s consolidated GMS — a key metric to measure sales — came in at $2.79 billion during the first quarter, down from $2.99 billion a year earlier
The company forecast its second-quarter GMS to decline at a rate similar to or potentially slightly better than the first quarter.
Etsy’s quarterly revenue rose about 1% to $651.2 million, surpassing analysts’ expectations of $642.7 million.
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Shreya Biswas)
Comments