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Etsy’s Quarterly Revenue Climbs Despite Pullback in Marketing

Etsy’s Quarterly Revenue Climbs Despite Pullback in Marketing

ETSY reported earnings late Wednesday. For its fourth-quarter outlook, the e-commerce company expects revenue in the range of $660 million to $690 million. The midpoint of $675 million is below analyst estimates for $691.4 million.

Analysts, however, focused more on gross merchandise sales, which outperformed analyst estimates despite a pullback in marketing expenses. GMS represents the total value of goods sold.

Gross merchandise sales climbed 18% to $3.1 billion, above the average estimate of $2.97 billion. Etsy said it expects GMS in the range of $3.9 billion to $4.1 billion in the fourth quarter, or about 5% ahead of expectations.

“While fourth-quarter revenue guide was modesty below, we believe the outlook is conservative given strong Q4 start, tailwinds from supply chain advantages and better consumer experiences, wrote Oppenheimer analyst Jason Helstein in a note to clients. Helfstein raised his price target on Etsy stock to 285, from 225, with a rating of outperform.

Etsy Stock Jumps On Sales Strength

Etsy stock jumped 13.2% to close at 271.27 on the stock market today.

The company reported adjusted earnings of 62 cents a share on revenue of $532.4 million. Analysts expected Etsy to report earnings of 55 cents a share on revenue of $519.3 million, according to FactSet. Third-quarter revenue climbed 18% from the year-ago period.

“Etsy once again delivered a sizable GMS beat and raise, which was even more impressive considering upside would likely have been greater had marketing spend been consistent with expectations,” Jefferies analyst John Colantuoni wrote in a note to clients. Etsy’s marketing spends in the quarter was well below expectations.

Colantuoni raised his price target on Etsy stock to 275 from 265.

2020 Revenue More Than Doubled

In 2020, Etsy’s revenue more than doubled as consumers turned to online shopping sites during the pandemic.

The company provides an online e-commerce platform where creators of arts and crafts, vintage items, and other unique goods go to sell their products.

Etsy said active sellers rose to 7.46 million, above estimates of 5.7 million. Active buyers topped 96 million, above projections of 91.8 million.

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