Etsy has exceeded Wall Street expectations for quarterly revenue, helped by a strong demand for bags and personalized gifts, sending its shares up 5% in extended trading.
The results indicate that the marketplace remains popular among cost-savvy shoppers, despite the looming threat of recession set to impact non-essential spending.
Net revenue rose to $807.2 million in the quarter from $717.1 million a year prior. Analysts on average had expected revenue of about $751.8 million, as per Refinitiv data.
For the first quarter, the platform forecast revenue in the vicinity of $600 million to $640 million, compared with analysts’ prediction of $621.6 million.
The marketplace also expects first quarter gross merchandise sales, an essential industry metric, to be in the range of $2.95 billion to $3.15 billion, compared to $4 billion reported in the fourth quarter ending 31 December.
According to short seller Citron Research, Etsy has also become one of the largest platforms in the world for counterfeit goods, sending its shares down by over 8%.
The amount of counterfeit items on the marketplace has become too large and Etsy can no longer dismiss it as a small percentage of revenue, Citron claims.
In response, Etsy said that counterfeit items were banned on the marketplace, with CEO Josh Silverman reiterating the company’s safety measures on a post-earnings call.
“Shoppers are coming to us more frequently and spending more with Etsy,” Silverman said, adding that the platform is continuing to develop the “Etsy habit”.
CFRA Research analyst Arun Sundaram added: “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).”
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