Etsy shares jumped after the fourth quarter earnings fell

Josh Silverman, CEO of Etsy.

Adam Jeffery | CNBC

Shares of Etsy rose as much as 24% in extended trading on Thursday, as the company announced better-than-expected results for the fourth quarter. Shares had already risen 10% during the trading session, as shares rallied late the day after the first dive into the news of Russia’s invasion of Ukraine.

See how the company did it:

  • Profits: $ 1.11 versus 79 cents expected, according to analysts surveyed by Refinitiv
  • Income: $ 717 million versus $ 685 million expected.

Etsy said it had 96.3 million active buyers on the platform since the fourth quarter, a touch higher than analysts’ forecast of 95.6 million.

Revenue growth slowed to 16% year-on-year during the quarter. Etsy sales growth exceeded 100% in 2020, but has slowed in recent quarters.

The digital retailer said it expects first-quarter revenue to be between $ 565 million and $ 590 million, while Wall Street forecasts revenue of $ 630 million. Gross commodity sales for the quarter are projected to range from $ 3.2 billion to $ 3.4 billion, which is lower than the consensus estimate of $ 3.5 billion.

However, investors did not seem to be bothered by moderate expectations, focusing instead on fourth-quarter earnings and sales results.

Etsy’s CFO Rachel Glaser blamed GMS ‘weak prospects for the first quarter for the difficult comparisons with the previous period, when the company saw a pandemic-related boost in orders, as well as an increase in costs associated with state incentives.

Ecommerce companies such as Etsy, Shopify, eBay and Wayfair have all experienced revenue growth during the worst months of the coronavirus pandemic. In the midst of the lockdown, many consumers cut back on store trips to prevent the virus from spreading and turned to online retailers for basic and unnecessary purchases.

Glaser said it believes Etsy, which operates an online marketplace known for its handmade and personalized products, will be able to continue to expand into a post-pandemic world.

“Even without the significant celestial winds of stimulus controls and lockdowns, our guidance for the first quarter of 2022 reflects our expectation that we will maintain all the gains made in 2021 – indicating our faith in the growth of the last two years.” , said Glaser. . “Furthermore, assuming stable macroeconomic conditions, we currently expect lower GMS growth from year to year in the first half of 2022 and higher GMS growth in the second half, given the more demanding comparisons in the first half.”

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Etsy shares jumped after the fourth quarter earnings fell

Source link Etsy shares jumped after the fourth quarter earnings fell

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