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Etsy Shares plummeted on Wednesday after the company recorded mixed results in the first quarter.
This is how the company does it:
Earnings per share: 46 cents adjusted per share vs. 49 cents expected at LSEGREVENUE: LSEG expects $651.2 million vs. $643 million
Etsy shares fell more than 9% in afternoon trading. This is because stocks fell sharply after new economic data showed a contraction of 0.3%. Data is concerned that the economy is heading towards a recession following President Donald Trump’s sudden policy changes, primarily focusing on trade.
The e-commerce company reported a net loss of $52.1 million or a loss of 49 cents per share compared to its earnings of $68 million, or 48 cents per share a year ago.
Etsy said the results reflected the impairment charges of $101.7 million from the reverb sales. Earlier this month, the company announced it would sell its instrument market, which it acquired in 2019, focusing on the core market it purchased in 2021 and the second-hand platform Depop.
Quarterly revenue rose approximately 1% to $651.2 million, breaking analysts’ forecast of $643 million.
Etsy operates an online marketplace that connects buyers and sellers with mostly handmade products. Like many other retailers, the company is digesting the impact of Trump’s drastic tariffs, but CEO Josh Silverman said in February that the company was “big less” on Chinese products, which suffered an offensive tax of 145%.
Etsy CFO Lanny Baker said Wednesday that the company is “facing uncertainty” about its tariff announcement and “a liquid state of consumer confidence in the core market.”
The company also said it has set up a “small operational task force” to address tariffs. This allows buyers and sellers to provide guidance on delivery timelines along with other information. Earlier this month, Etsy began highlighting products from domestic sellers on its site as a way for shoppers to avoid additional costs associated with Trump’s tariffs.
About 90% of sellers source their products domestically, Silverman said in a call with investors.
Etsy One Day Stock Chart.
“Of course, we are monitoring the impact of Ricochetto on higher global tariffs on consumer spending in the core market, particularly in terms of the costs of items purchased daily and how they affect consumer demand for discretionary items,” Silverman said.
Total sales, a key metric measuring the total volume of goods sold on the platform, fell 6.5% year-on-year to $27.9 billion, according to FactSet.
In the second quarter, Etsy predicts GMS will decrease by a rate similar to or “potentially slightly better” to the 6.5% rate it saw in the quarter.
Active sellers on the platform showed a four-quarter decline, down 11.3% year-on-year, down nearly 8.1 million. Additionally, active buyers fell to 94.8 million for the second consecutive quarter. Both numbers include sellers and buyers of Core Etsy Marketplace, Depop and Reverb.
Etsy has been working to reinforce its image as a unique gift and product destination to fight back on growth and combat the fiercely competitive e-commerce market dominated by Amazon and more recently Chinese online retailers Temu, Shein and Tiktok Shop.
Corrected: This article was updated to reflect quarterly Etsy’s revenues of 46 cents per share. Previous versions of this story state the wrong amount.
