Etsy Shares Surge on Better-Than-Expected Results

Shares of Etsy rose 11.7% in late trading to $106.69. They were down more than 56% this year through Wednesday’s close.

The higher sales helped blunt rising costs and other macroeconomic headwinds. Consolidated gross merchandise sales, a measure of overall sales on Etsy, fell slightly to $3 billion, as more people return to shopping in stores and inflation erodes consumer spending power.

Chief Executive

Josh Silverman

said that Etsy continues to hold on to most of the gains it registered during the pandemic, when consumers flocked to the site to buy everything from face masks to custom home décor.

For the period ended June 30, Etsy recorded a profit of $73.1 million, or 51 cents a share, compared with $98.3 million, or 68 cents a share, a year earlier. Analysts polled by FactSet expected earnings of 32 cents a share.

Total revenue hit $585.1 million, beating analysts’ expectations of $556 million. In May, Etsy forecast revenue of $540 million to $590 million for the quarter.

The company said higher expenses related to employee wages led to the decline in profit. Etsy’s total head count increased 70% from a year ago, including workers it gained from last year’s acquisitions of Depop, a peer-to-peer e-commerce company, and Brazilian e-commerce company Elo7.

The acquisitions helped boost revenues for the quarter, said Chief Financial Officer

Rachel Glaser.

Operating expenses were also up 17% to $341.2 million for marketing, product development and other general and administrative costs.