Earnings

Etsy Enjoys Strongest Revenue Growth In Four Years

etsy-revenue-growth

After-hours trading saw shares in eCommerce handcrafted marketplace Etsy jump 6 percent after the firm logged stronger than expected earnings during the holiday quarter of 2018.  The retailer’s revenues hit about $200m in the last three months of 2018, a 47 percent year-on-year increase.  And revenue wasn’t the only arrow pointing up — buyers using the platform increased by 18 percent, while active sellers were up by 9 percent.

It was Etsy’s strongest year of revenue growth since the firm appeared on the stock exchange in 2015.  It also comes after Etsy faced a long period of uncertainty, particularly as it has had to go head-to-head with Amazon in the last two years.  Amazon announced its own handmade marketplace as a direct competitor to Etsy in late 2017.

The following year in 2017, Etsy replaced its chief executive and announced several rounds of job cuts, and concerns began circulating that Etsy was simply not up to taking on the Amazon-based competition.

Etsy current chief executive Josh Silverman said executives believe the firm’s 2018 expansion outpaced the overall eCommerce market.

“We are gaining share,” he noted.

And investors are noticing, as the firm’s share price has nearly tripled in the last 12 months as investors are becoming increasingly confident that Etsy maybe able to hold out and compete with Amazon after all.  In 2018 Etsy sellers collectively unloaded around $4 billion in merchandise, a 20 percent uptick from the previous year. Growth was particularly strong abroad in the United Kingdom, where sales reportedly hit record levels in late 2018. The increased activity there drove about $600 million in revenue for Etsy last year — a more than 36 percent-year-on-year increase.

But while Etsy may be gaining ground, it isn’t doing it for cheap. Full-year profits slipped 5 percent to about $77.5 million as the firm spent more on both marketing and product development during the year.  Search improvements and free shipping were chief among upgrades Etsy announced in 2018.

Etsy said it expects growth to continue in 2019, with revenue gains of 29 percent to 32 percent. It forecasts merchandise sales will also increase, by 17 percent to 20 percent.

 

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