Etsy (NASDAQ:ETSY) Inc shares jumped 10% pre-market Friday after the company reported better-than-expected results for the fourth quarter after-hours on Thursday, CNBC reported.
Earnings were $1.11 vs. 79 cents expected, according to analysts surveyed by Refinitiv, while revenue was $717 million as compared to $685 million expected.
Etsy (NASDAQ:ETSY) said it had 96.3 million active buyers on the platform as of the fourth quarter, a touch higher than analysts’ projected 95.6 million.
Revenue growth slowed to 16% year-over-year during the quarter. Etsy (NASDAQ:ETSY) sales growth topped 100% in 2020, but have decelerated in recent quarters.
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The digital retailer said it expects first-quarter revenue to come in between $565 million and $590 million, while Wall Street projected revenue of $630 million. Gross merchandise sales during the quarter are projected to be in the range of $3.2 billion to $3.4 billion, which is lower than consensus estimates of $3.5 billion.
But investors appeared to be unfazed by the middling expectations, focusing instead on the fourth-quarter earnings and sales results.
Etsy chief finance officer Rachel Glaser blamed the weak first-quarter GMS outlook on tough comparisons with the year-earlier period when the company saw a pandemic-related boost in orders, as well as an increase in spending tied to government stimulus.
E-commerce companies like Etsy, Shopify (TSX:SH., NYSE:SHOP), eBay, and Wayfair have all experienced a revenue lift during the worst months of the coronavirus pandemic. Amid lockdowns, many consumers curbed trips to the store to avoid spreading the virus and turned to online retailers for essential and nonessential purchases.
Glaser said she believed Etsy, which operates an online marketplace known for handmade and personalized goods, will be able to keep expanding its business in a post-pandemic world.
“Even without the significant tailwinds of stimulus checks and lockdowns, our first quarter 2022 guidance reflects our expectation that we will keep all of the gains made in 2021 — indicating our belief in the durability of the last two years’ growth,” Glaser said.
She added: “Furthermore, assuming stable macroeconomic conditions, we currently expect lower GMS (gross merchandise sales) growth year over year in the first half of 2022 and higher GMS growth in the second half, given the more challenging comparisons in the first half.”
Contact Ritika at ritika@proactiveinvestors.com