- Etsy refund for $200 plastic cup spirals into angry, viral TikToks Insider
- ‘Congratulations, Starbucks, on wasting my time for an entire month’: Customer slams Starbucks for Life, says she won nothing after playing 5 times a day msnNOW
- An Etsy customer’s refund request for a broken $200 plastic cup spiraled into a furious exchange that went viral on TikTok Yahoo News
- ‘Congratulations, Starbucks, on wasting my time for an entire month’: Customer slams Starbucks for Life, says she won nothing after playing 5 times a day The Daily Dot
- View Full Coverage on Google News
Tag Archives: Etsy
Twitch Considering Cutting Streamer Pay to Boost Profits
2022 is shaping up to be a rough year for content creators and sellers trying to make living through major tech platforms. Sellers on Amazon and Etsy are already facing increased fees and now new pay cuts may reportedly make their way to Twitch.
A new Bloomberg report citing people familiar with Twitch’s pay planning claims the company wants to incentivize streamers to run more ads in addition to considering reducing the portion of subscription fees allocated to performers. More specifically, the site’s top streamers would reportedly see their share of subscriptions dip down from 70% to 50%, according to Bloomberg. The company is also considering introducing multiple pay tiers with different criteria required to qualify for each. All told, these changes are intended to boost Twitch’s profitability, though it could come at the expense of their community’s most active users.
Twitch did not immediately respond to Gizmodo’s request for comment.
On the flip side, the sources speaking with Bloomberg said the company may consider easing up on its exclusivity restrictions which would let creators stream on other platforms and potentially raking in some additional income there as well.
The tentative monetization considerations come amid a time of flux at Twitch. On one hand, the company’s riding high on a pandemic induced viewership surge. Some 24% of U.S. internet users between the ages of 16 to 64 said they began watching more live streams during the pandemic, according to GlobalWebIndex data viewed by Insider Intelligence. On the other hand though, even with that uptick in eyeballs, Twitch is simultaneously reeling from what Bloomberg calls a mass “exodus” of employees disappointed in the company’s direction. Some 300 employees reportedly left Twitch last year, with another 60 leaving in the first three months of 2022. Some top creators have left too. In the past year both DrLupo and TimTheTatman, two prominent streamers, left the site for rival YouTube.
Twitch streamers aren’t the only ones bracing for a financial squeeze from their Big Tech bosses.
Earlier this year, Amazon announced it would add a 5% “fuel and inflation surcharge” to third party sellers who use the company’s fulfillment centers as a way to offset increased costs. In a notice to sellers viewed by the Associated Press, Amazon said increased hourly wages, construction costs, and new hires during the pandemic were all to blame for the increased price hikes. Still, Amazon wasn’t exactly struggling as a company during the pandemic, though. In the first quarter of 2021, the company posted a record $108.5 billion in revenue which comes out to nearly triple its revenue from the same time the previous year.
Over at Etsy sellers went on strike and issued a digital boycott over what they viewed as exorbitant increases to seller fees. Etsy recently tried to increase seller transaction fees by 30% which would in effect raise the seller fee from 5% to 6.5%
Cramer sees post-Covid staying power for Etsy, Cash App parent Block
Etsy and Block are Covid-era winners that will continue to thrive even after the pandemic, CNBC’s Jim Cramer contended on Friday.
“You need to understand just how special these stocks are,” the “Mad Money” host said. “While they can have some huge swings, once the volatility’s over, I bet they won’t easily give back their gains.”
Etsy shares soared 16% Friday after the e-commerce marketplace provider reported better-than-expected earnings and revenue Thursday. Even with Friday’s big move, the stock is down nearly 50% over the past three months. The steep decline came as Wall Street rotated into more defensive parts of the stock market and as investors questioned the staying power of pandemic success stories.
Shares of Block, formerly known as Square, skyrocketed 26% Friday after beating Wall Street expectations on earnings and revenue for its fourth quarter. The company also released a rosy outlook for the current quarter and full-year based on the growth of its mobile payment service, Cash App.
Like Etsy’s, Block’s stock has been crushed in recent months. It’s still down more than 40% over the past three months, despite Friday’s gains.
Cramer, who previously warned that many companies aren’t ready for a post-pandemic world, said that the payment giant is “firing on all cylinders” and praised Cash App as “brilliant.”
As for Etsy, Cramer said the e-commerce shopping platform’s growth internationally, evidenced by its recent increase in transaction fees from 5% to 6.5%, signals a path to success even after the pandemic. “Because of Etsy’s unique nature as the No. 1 marketplace for handcrafted goods, I doubt there will be any resistance,” he added.
Cramer also named DoorDash and Airbnb as other Covid-era winners that he believes will continue to succeed post-pandemic.
Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market.
Etsy Stock Jumps On Earnings Report Beat
Etsy stock soared Friday, which follows a fourth-quarter earnings report that soundly beat expectations. The Etsy (ETSY) earnings report came late Thursday.
X
The company reported adjusted earnings of $1.11 a share on revenue of $717.1 million. Analysts expected Etsy to report earnings of 79 cents on revenue of $684.5 million. Revenue rose 16% from the year-ago period.
Active sellers on Etsy jumped 72% to reach 7.5 million. Active buyers rose 17.6% to 96.3 million.
Etsy stock jumped 9% to 137.20, during morning trading on the stock market today. During regular-hours trading on Thursday, Etsy surged 10%, bouncing off an 18-month low.
Needham analyst Anna Andreeva maintained a buy rating on Etsy stock with a price target of 280.
Etsy Stock: Sales Figure Hits All-Time High
The company provides an online e-commerce platform where creators of arts and crafts, vintage items and other unique goods go to sell their products.
Among highlights in the quarter, said Etsy, gross merchandise sales per active seller hit an all-time high $136, up 16%. Also, more than half of Etsy’s 2020 active buyers, and 37% of 2020 new buyers came back to make a purchase in 2021.
The company also said consolidated gross merchandise sales came in at a record $4.2 billion, up 16.5%.
“Our record fourth quarter GMS performance was driven by an early and strong kickoff to the holiday season in October and extended strength through December,” the company said.
“Reflecting on 2021, it is fair to say that Etsy has retained much of the positive impact we’ve seen from the dramatic adoption of e-commerce following the start of the Covid-19 pandemic,” Chief Executive Josh Silverman said in written remarks with the Etsy earnings release.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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Etsy hits sellers with 30 percent transaction fee increase
Following a record-breaking 2021 fourth quarter, Etsy is raising seller transaction fees from 5 percent to 6.5 percent, the company announced today. In a report to investors today, the company says the 30 percent increase will take effect beginning on April 11th. The transaction fee is the percentage of the total order amount Etsy charges when a seller makes a sale.
The added expense to sellers comes as Etsy announced a fourth-quarter revenue of $717.1 million, which the company attributes to a strong holiday shopping season. Etsy added 10 million new buyers in the fourth quarter of 2021, bringing the number of active buyers to a record 90 million. Stock prices jumped more than 15 percent after market close on Thursday following the report to investors.
“We have demonstrated our ability to make improvements that directly translate into more sales for our sellers, as evidenced by record sales per seller in 2021,” Etsy CEO Josh Silverman says in the report. “Our new transaction fee will enable us to invest in key areas like marketing and support to further extend our strong momentum.”
Etsy says the increase in fees will mostly pay for “marketing, seller tools, and creating world-class customer experiences.” But past changes to features for sellers — like the controversial advertising program — have not gone over well with sellers, some of whom are unable to opt-out.
Higher seller fees are likely to upset merchants on the platform, who for years have complained about changes at Etsy as the company grows. The last time Etsy raised transaction fees was in 2018, when it went from 3.5 percent to the current 5 percent, and sellers also pay $0.20 for listing an item, plus payment processing fees.
Beyond Meat, Etsy & more
Beyond Meat “Beyond Burger” patties made from plant-based substitutes for meat products sit on a shelf for sale in New York City.
Angela Weiss | AFP | Getty Images
Check out the companies making headlines after the bell:
Beyond Meat — Shares of the meat alternative producer tumbled more than 11% in extended trading after the company reported a wider-than-expected loss and shrinking revenue for its fourth quarter. Beyond Meat also released a weak forecast for its 2022 revenue.
Coinbase — Shares of the crypto trading platform dipped more than 5% in after-hours trading even after the company reported fourth-quarter earnings that beat analyst estimates. The company predicted that retail Monthly Transaction Users and total trading volume would be lower in Q1 2022 compared with Q4 2021.
Etsy — The online marketplace saw its stock pop a whopping 15% after the company beat analysts’ estimates for the fourth quarter. Etsy reported earnings of $1.11 per share for the December quarter, ahead of analysts’ consensus expectations of 79 cents, according to Refinitiv. Its quarterly revenue also came in above expectations.
KAR Auction Services — Shares of the used car company soared more than 60% in extended trading after it said it has agreed to be acquired by Carvana in a $2.2 billion all-cash deal. Carvana, which also reported a wider-than-expected loss for the fourth quarter, saw its stock fall more than 10% in after-hours trading.
Animal Crossing’s New Amiibo Cards Nearly Impossible To Find
Nintendo has once again released Amiibo Cards for Animal Crossing: New Horizons and they’ve once again sold out, leading to a second-hand market full of hassle and sky-high mark-ups. It’s perfect timing considering the game’s big 2.0 update and Happy Home Paradise DLC recently went live, and players are desperate to get new villagers onto their islands.
In case you’re unaware, Amiibo Cards are like trading cards that activate virtual goods inSwitch games via NFC (near-field communication) technology. In Animal Crossing’s case, the random cards in each pack correspond to villagers, who will then move to your island when the card is scanned. It beats waiting around to get lucky over the course of the game, especially for players after the rarest and most coveted island residents.
On November 5, Nintendo released the fifth series of Animal Crossing Amiibo Cards, containing some extremely sought-after returning villagers like Shino and Sasha, both of whom currently go for millions of bells (Animal Crossing’s currency) in the in-game multiplayer market. At least, it released them in theory. In practice the cards were more or less immediately out of stock online, and if you tried to buy them in person you were much more likely to encounter a confused store clerk or empty shelf than any new packs.
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Some fans who tried to get a head start on the mayhem reported long lines outside of places like Target. Others had no choice but to peruse sites like eBay and decide whether or not the prices being charged by scalpers were worth it.
The packs of six cards normally cost $6 each, but many resellers are currently selling them for $20 or more. “6 PACKS Nintendo Animal Crossing Amiibo Character Cards Series 5 – SHIPS TODAY!” reads one listing for $175. On Amazon they’re going for over $40 a pack. Because each pack’s contents are random, players desperate enough to partake could end up paying for mostly duplicates anyway, never even getting the rare villager they want.
Read More: The Bootleg Amiibo Business Is Booming, Thanks To Nintendo
“I was lucky enough to get a couple packs because of a few people I follow on Twitter,” wrote one person in the Best Buy reviews section. “These packs are great. I’m really happy with my pulls. I do wish the cards weren’t so hard to get. It baffles me that a multi billion dollar company can’t distribute more Amiibos.” Another simply wrote, “The scalpers ruin another thing that’s supposed to bring small children joy.”
If you’re getting a massive case of déjà vu it’s because the market for ACNH accessories has been a mess since the game launched. As a result, a whole black market around custom hacked Amiibo Cards has risen up on places like Etsy. Unfortunately, Nintendo doesn’t seem eager to expand supply to meet demand.
Earlier this year, Nintendo released Sanrio Amiibo Cards containing Hello Kitty-themed villagers and items. Those, too, sold out immediately and made everyone sad.
Stock Market Today: Dow Holds Near Records, the Fed Meets, Zillow Slumps
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Fed Chair Jerome Powell’s press conference Wednesday afternoon will be closely watched.
Kevin Dietsch/Getty Images
The
Dow Jones Industrial Average
was slightly lower Wednesday morning after closing at a record high Tuesday as markets await the Federal Reserve’s monetary policy decision.
In morning trading, the Dow was off 75 points, or 0.2%, after the blue-chip benchmark closed above 36,000 for the first time. The
S&P 500
fell 0.1%, while the
Nasdaq Composite
was essentially flat. All three indexes ended Tuesday at new all-time highs.
Today the spotlight is squarely on the Federal Open Market Committee (FOMC)—the Federal Reserve’s monetary-policy body. Its monthly meeting got under way Tuesday and will wrap up Wednesday with a statement from Fed Chair Jerome Powell.
“Stock futures are little changed near record highs as a sense of Fed paralysis grips the markets ahead of the FOMC announcement today,” wrote Tom Essaye, founder of Sevens Report Research before the market opened.
It’s largely expected that the central bank will announce that it will start slowing, or tapering, its Covid-19 pandemic-era program of monthly asset purchases, which add liquidity to markets. The Fed has been buying $120 billion in bonds to keep their prices high and yields low since June 2020, when it settled into a steady pattern after more fervent bond-buying near the beginning of the pandemic.
Markets now largely expect that the Fed will begin slowing these purchases, which consist of Treasury securities and agency mortgage-backed securities, at a rate of about $15 billion a month, starting this month. If the central bank announces a faster pace, investors could react negatively, and it could put pressure on stocks.
The larger risk is that the Fed could indicate that it is considering short-term interest rate hikes sooner rather than later. With inflation running hot and economic growth slowing, an indication of a rate hike too soon could also cause a selloff in stocks.
“It is widely expected the central bank will commence tapering in November or perhaps December,” wrote Kent Engelke, chief economic strategist at Capitol Securities Management. “The question at hand is whether or not it will change its time line as to when it intends to increase the overnight rate.”
As the Fed looms, not even solid economic data could move stocks higher. The ADP jobs report showed that the U.S. added 571,000 private-sector jobs in October, above the consensus forecast for 395,000.
Also read: Is Inflation Here to Stay? The Data Are Cause for Worry. The Fed Will Have its Say Today
Overseas, Hong Kong’s
Hang Seng Index
slipped 0.3% as investors in Asia tread water ahead of the FOMC meeting. The pan-European
Stoxx 600
was up 0.1% as investors in Europe adopted a similar wait-and-see attitude.
In commodity markets, oil prices fell back amid indications that U.S. crude supply is higher than expected and pressure on the OPEC+ group of national producers to ramp up production.
U.S. futures for West Texas Intermediate crude were down 2.5% to around $81.80 after trading near $85 earlier in the week—the highest levels since late 2014.
Analysts cited data from the American Petroleum Institute Tuesday showing that U.S. crude inventories jumped by 3.6 million barrels last week—far more than the 1.5 million estimated—in a surprise to supply expectations. That puts the spotlight on official data Wednesday from the U.S. Energy Information Administration.
Here are six stocks on the move Wednesday:
Lyft (ticker: LYFT) stock gained 11% after the company’s earnings report showed a more than 50% rise in adjusted earnings before interest, tax and non-cash expenses. Sales were $864 million, above expectations for $863 million.
Lyft’s results helped rival
Uber (UBER) stock rise 5.6% ahead of its Thursday earnings report.
Bed Bath & Beyond (BBBY) stock gained 34% after the company announced a partnership with
Kroger (KR) to sell certain products at the grocer’s locations and through online channels. Still, the Bed Bath & Beyond stock is also benefiting from its status as a “meme stock,” so the initial buying has forced short-sellers to buy shares back.
Zillow Group (ZG) stock dropped 19% after seeing several analyst downgrades after the company said it will terminate its home buying and selling business.
Shake Shack (SHAK) stock gained 3.8% after getting upgraded to Buy from Neutral at Northcoast.
CVS Health (CVS) stock rose 3.6% after the company reported a profit of $1.97 a share, beating estimates of $1.78 a share, on sales of $73.8 billion, above expectations for $70.5 billion.
Write to Jacob Sonenshine at jacob.sonenshine@barrons.com
Dow Jones Futures: Roku, Etsy Dive On Earnings; AMD, Robinhood Signal Meme Stock Shift
Dow Jones futures rose slightly Wednesday night, along with S&P 500 futures and Nasdaq futures. The stock market rally closed mixed after a weak jobs report and a continued retreat in crude oil prices weighed on real economy sectors, even as tech names edged higher. Roku (ROKU) and Etsy stock were big earnings losers overnight.
Advanced Micro Devices (AMD) and Robinhood (HOOD) surged again, as Reddit investors buzz about these names. Coming as “traditional” meme stocks such as GameStop (GME) and AMC Entertainment (AMC) continue to slide, the rise of AMD and HOOD stock suggest a key shift.
Roku stock, Etsy (ETSY), Revolve (RVLV), DXC Technology (DXC), Innovative Industrial Properties (IIPR) and Qorvo (QRVO), which makes chips for Apple (AAPL) and 5G devices, reported earnings after the close.
All six stocks beat earnings views. But Roku, Etsy and RVLV stocks were big losers, along with DXC. IIPR rose modestly and QRVO stock edged higher.
DXC stock is on IBD Leaderboard. Roku stock and IIPR are on the IBD 50.
Dow Jones Futures Today
Dow Jones futures rose 0.25% vs. fair value. S&P 500 futures advanced 0.2% and Nasdaq 100 futures climbed 0.15%.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
Stock Market Rally
The stock market rally struggled amid falling crude oil prices, a weak ADP employment report and an earnings miss sell-off in General Motors (GM). Crude oil prices slid 3.4% to $68.15 a barrel, continuing a sharp drop this week. U.S. crude inventories rose last week, the Energy Information Administration said Wednesday morning. Copper prices also retreated. The 10-year Treasury yield rebounded to close up 1 basis point to 1.19%.
The Dow Jones Industrial Average fell 0.9% in Wednesday’s stock market trading. The S&P 500 index sank 0.5%. The Nasdaq composite eked out a 0.1% gain. The small-cap Russell 2000 skidded 1.25%.
Top ETFs
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.5%, while the Innovator IBD Breakout Opportunities ETF (BOUT) fell 0.5%. The iShares Expanded Tech-Software Sector ETF (IGV) climbed 1.15%. The VanEck Vectors Semiconductor ETF (SMH) advanced 1.1%.
SPDR S&P Metals & Mining ETF (XME) tumbled 4% and Global X U.S. Infrastructure Development ETF (PAVE) gave up 1.7%. U.S. Global Jets ETF (JETS) retreated 2.2%. SPDR S&P Homebuilders ETF (XHB) slid 1.1%. The Energy Select SPDR ETF (XLE) declined 2.7% and the Financial Select SPDR ETF (XLF) 0.8%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) popped 2.55%, back above its 200-day line. ARK Genomics ETF (ARKG) advanced 0.6%, but is still below its 200-day and 50-day lines. Roku stock is a major ARK Invest holding.
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Roku Earnings
Roku earnings crushed EPS views, but user growth came up short. Hours streamed on Roku devices also disappointed investors.
Roku stock tumbled 9% in extended trade. Shares had edged up 0.6% on Wednesday to 420.32, near their 10-week moving average again. Roku stock broke out from a 463.09 cup-with-handle buy point on July 23, but that quickly failed. A bullish rebound from the 10-week line, or a move above a new, high-ish handle entry of 490.86 are possible buying opportunities.
But right now, Roku stock looks poised to undercut an early entry of 397.79.
Etsy Earnings
Etsy earnings beat, but revenue guidance was weak for the arts and crafts e-commerce giant.
Etsy stock plunged 14% overnight, signaling a gap below its 50-day and 200-day lines. Shares jumped 6.1% on Wednesday to 202.10. Etsy stock has an early entry at 211.92, with the official buy point at 251.96.
DXC Earnings
DXC earnings topped views, surging 300% and ending a long string of year-over-year declines. But it guided slightly lower on Q2 earnings.
DXC stock fell 6% in extended action. Shares fell 2.9% to 42.18 on Wednesday. DXC stock closed in range from a 41.85 flat-base buy point.
IIPR Earnings
IIPR earnings topped forecasts for the cannabis-focused REIT.
IIPR stock climbed 2% overnight. Shares edged up 0.2% to 213.89 on Wednesday. IIPR stock is working on a 222.18 cup base going back to late February.
Revolve Earnings
Revolve earnings also exceeded forecasts. However, Revolve stock slumped 6% in extended trade, though that was off after-hours lows.
RVLV stock slid 2.9% to 71.34 on Wednesday, reversing from a record high of 74.82. Shares cleared a short consolidation on Tuesday, but it’s not clear what would be a good entry after a strong rally. It’s possible RVLV stock will fall to its 50-day or 10-week line.
Qorvo Earnings
Qorvo earnings beat fiscal Q1 views, with EPS and sales growth accelerating again. The Apple chipmaker guided higher on earnings for the current quarter.
Qorvo stock edged higher in overnight action. Shares dipped 0.7% to 193.88 on Wednesday. QRVO stock has a 199.05 cup-with-handle buy point, according to MarketSmith analysis.
Apple stock was little changed late. Shares edged down 0.3% to 146.95 on Wednesday. Apple stock is slightly extended from a 137.17 cup-with-handle base, but it’s still in buy range from a longer cup pattern going back to January with a 145.19 entry. AAPL stock has been consolidating for a few weeks, creating a shelf that could turn into a short base.
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Meme Stock Shift?
AMD stock rose 5.5% to 118.77, in the heaviest volume in more than a year. Shares are up 30.5% in six sessions following earnings. AMD stock is now greatly extended from a 95.54 cup-with-handle buy point.
Robinhood stock shot up 50% to 70.39, spiking to 85 intraday. Shares fell somewhat overnight in still-active trade.
HOOD stock has more than doubled from its July 30 low of 33.25, the day after debuting with an IPO price of 38. The no-fee brokerage, in addition to Reddit buzz, has been cheered on CNBC’s Jim Cramer while ARK Invest’s Cathie Wood has made big HOOD stock buys in its short history.
Meanwhile, the original meme stocks, GME stock and AMC, continued to slump. GameStop stock fell 3.9% to 146.80, the lowest price since early May and 70% off its late January peak of 483. AMC stock tumbled 11% to 29.84, a two-month low and 59% off its June 2 peak of 72.62.
Meme investors embracing stocks like AMD stock and HOOD over GME stock and AMC suggests a fundamental shift.
GameStop and AMC Entertainment, despite a bump in business in 2021 vs. pandemic closures last year, are in rapid decline. While investors make various claims about how these companies could be big winners, they are highly speculative at best, especially at current stock valuations.
Meanwhile, AMD is highly profitable, with a bright future. Robinhood is growing rapidly and expected to be profitable again in 2022. While it may or may not be a big winner long-term, it’s clear that Robinhood has a real, growing business with a more-than-plausible bright future.
In other words, meme investing may be becoming a souped-up social media version of old school hyping up growth stocks. That could be much more appealing to IBD-style growth investors.
Market Rally Analysis
The stock market rally had a mixed session, but all of the major indexes continue to look healthy, close to all-time levels. The Dow Jones fell to its 21-day exponential moving average. The S&P 500 barely budged from just below record highs. The Nasdaq composite tilted higher.
Growth stocks had a solid session. Paycom Software (PAYC), Horizon Therapeutics (HZNP) and Sprout Social (SPT) gapped up or rose powerfully past buy points on earnings. ZoomInfo Technologies (ZI), which saw its Tuesday’s gap-up whither, rallied 7.3% on Wednesday, back to the top of the base.
Meanwhile, AMD stock kept running up while rival Nvidia (NVDA) and software leaders CrowdStrike (CRWD) and Shopify (SHOP) had solid gains.
Real economy names had a tougher time, with energy prices weak and some concerns about the economic outlook.
The Russell 2000 hit resistance again at its 21-day line, and is now 3% below its 50-day. That’s not a good sign for market breadth.
However, several top steelmakers are consolidating nicely in or near buy zones, while housing-related plays are also acting well. RH (RH), Wednesday’s IBD Stock Of The Day, flashed an early entry on Wednesday.
Time The Market With IBD’s ETF Market Strategy
What To Do Now
The after-hours selling in Roku stock, along with Etsy and Revolve, show why it’s so important to make hard decisions heading into earnings.
As earnings season shifts from a tsunami of earnings to a mere flood, the slew of big winners and losers may calm down. But with the broader market going sideways and sector rotation still a factor, it’s still a tricky market, especially for new buys.
Try to buy stocks as close as possible to the buy point, whether it’s an early entry or a traditional breakout. That will reduce the odds of being shaken out from choppy action and reversals. Catching stocks quickly means doing your homework — building up your watchlists and setting up alerts. Then be ready to act when those stocks flash buy signals. Also be ready to act if your holdings trigger your sell signals.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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Etsy Stock Tumbles, Despite a Solid Earnings Report
Text size
Etsy stock slid sharply after earnings.
Gabby Jones/Bloomberg
Etsy
stock was in free fall late Wednesday after the artisanal crafts e-tailer’s sales outlook eclipsed a solid second-quarter earnings report.
Etsy (ticker: ETSY) reported second-quarter earnings of 68 cents a share, beating Wall Street expectations for 63 cents. Sales came in at $529 million, just topping analyst projections for $525 million. The company posted $3 billion in consolidated gross merchandise sales, within management’s guidance for $2.8 billion to $3.1 billion.
Additionally, active sellers increased by 67% in the quarter, and active buyers increased by 50.1% compared with the same period last year. Gross merchandise sales per active buyer also grew 22% year over year.
Still, Etsy stock nosedived 14.5% in after-hours trading to $172.85.
What likely has investors concerned is that Etsy’s third-quarter guidance suggests the company may cede ground as the economy reopens. Management is forecasting revenue between $500 million and $525 million for the September quarter, falling short of analyst estimates for $528 million in sales for the period. Etsy again didn’t provide full-year guidance.
In addition, beating analyst expectations might no longer be enough for e-commerce companies to keep investors satisfied.
Heading into earnings, analysts had high expectations for Etsy, projecting revenue and earnings figures that were on the high end of management’s guidance. While Etsy surpassed analysts’ benchmarks and posted numbers within its own guidance, investors appear to be reassessing the growth potential of e-commerce, especially after the surge in online spending during the Covid-19 pandemic. It also remains to be seen whether the economic reopening will allow bricks-and-mortar retailers to claw back consumer spending that otherwise would have gone online.
Across the board, shares of e-commerce companies have been taking a hit, despite better-than-expected earnings. Just last week, Just last week, Amazon.com (AMZN) beat earnings estimates, but sales came in slightly short of analyst forecasts for the e-commerce giant’s latest quarter. That prompted investors to wipe 7.4% off the company’s market capitalization in after-hours trading in the wake of the report.
Write to editors@barrons.com