Why Etsy’s Q1 Beat Was Not Nearly Good Enough
Etsy shares tumbled Thursday after the e-commerce company released its first-quarter financial results late Wednesday.
When Etsy Inc. (NASDAQ: ETSY) released its first-quarter financial results after the markets closed on Wednesday, the e-commerce company said that it had $0.24 in earnings per share (EPS) and $169.3 million in revenue. Consensus estimates had called for $0.14 in EPS and $170.06 million. In the same period of last year, Etsy said it had EPS of $0.10 on $120.91 million in revenue.
During the latest quarter, Gross merchandise sales (GMS) increased 18.9% year over year to $1.02 billion. GMS per active buyer on a trailing 12-month basis was up nearly 2% and has generated growth of nearly 2% or higher for the past three consecutive quarters.
International GMS was 38% of overall GMS, and they increased 33% year-over-year on a currency-neutral basis, Etsy’s highest international GMS growth since the beginning of 2015.
Active buyers grew 18.3% year over year, despite a reduction in marketing spend across certain channels. At the same time, active sellers grew 13.0%.
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Looking ahead to the 2019 full year, revenues are expected to be in the range of $785 million to $797 million and GMS between $4.6 billion and $4.8 billion. The consensus estimates are $0.68 in EPS and $792.42 million in revenue for the year.
Josh Silverman, Etsy CEO, commented:
We are pleased to report another quarter of strong growth. We began the year with a fresh slate of product initiatives and our teams’ development velocity surged to an all-time high, delivering healthy GMS growth during the quarter. We are focused on unlocking Etsy’s long-term growth opportunity by bolstering best-in-class search and discovery, leveraging human connections, building a trusted brand, and showcasing our vast collection of unique items.
Shares of Etsy were last seen down almost 11% at $60.66, in a 52-week range of $28.60 to $73.35. The consensus price target is $74.00
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
