Etsy earnings Q3 2022

Josh Silverman, CEO of Etsy

Adam Jeffery | CNBC

Etsy shares surged as a lot as 10% in prolonged trading Wednesday after the web market’s third-quarter income and earnings outperformed expectations. The firm additionally posted upbeat steerage for the present interval.

Here’s how the corporate did:

  • Earnings: 58 cents per share, adjusted, vs. 36 cents per share, as anticipated by analysts, based on Refinitiv.
  • Revenue: $594.5 million vs. $565 million as anticipated by analysts, based on Refinitiv.

For the fourth quarter, Etsy stated it expects to report income between $700 million and $780 million, and gross merchandise gross sales of $3.6 billion to $4 billion. Wall Street was projecting fourth-quarter gross sales of $743 million, and GMS of $3.9 billion, based on StreetAccount.

Etsy reported a web lack of $963.1 million in the course of the third quarter that included a goodwill impairment cost of $1.04 billion to write down down the worth of its acquisitions of style resale app Depop and Brazil-based market Elo7, which it bought for $1.62 billion and $217 million, respectively. Excluding the impairment cost, Etsy earnings have been 58 cents per share, adjusted.

Third-quarter income grew 11.7% from the year-ago interval, boosted by Etsy’s transaction price hike. The firm introduced final April it could elevate the transaction charges it fees sellers to six.5% from 5%, which spurred backlash from retailers, together with a weeklong strike.

Investors have been intently watching e-commerce firms’ forecasts for the fourth quarter as a barometer for inflation-weary shoppers’ willingness to spend in the course of the holidays. The newest warning got here from Amazon final week when it guided for fourth-quarter income progress of two% to eight%, lacking Wall Street’s expectations.

Analysts predict a lackluster vacation buying season, with on-line gross sales in November and December projected to develop simply 2.5% from the prior yr, based on Adobe.

“We don’t know whether consumers will spend more or less on gift giving, or whether they’ll do more shopping online or in the mall,” Etsy CEO Josh Silverman stated within the earnings launch. “But the good news is our business – with differentiated inventory across our House of Brands and a variable cost model – doesn’t depend upon us taking big bets on these questions in the same ways most other retailers or e-tailers must.”

“So we are doing all we can to help make sure Etsy sellers have the best holiday season they can – particularly in the face of continued economic uncertainty,” he added.

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