Shares of Etsy, Inc. surged in Thursday’s extended trading after it reported stronger-than-expected fourth-quarter results.
The American e-commerce company soared 20.55% or 26.34 points to $154.50 per share.
It followed the gain of 10.00% or 11.65 points to $128.16 per share during the regular hours market.
Generally, US stocks staged a late-day rally after plummeting on news of Russia’s invasion of Ukraine.
Etsy reported adjusted earnings of $1.11 per share, soundly surpassing the consensus of $0.79. The figure also represented an increase of 2.78% from $1.08 a year earlier.
At the same time, it posted an upbeat revenue of $717.10 million, higher than the $684.50 million. Revenue rose 16.00% year-over-year from the previous result of $617.35 billion.
The solid earnings benefitted from the upturn of users on the platform.
Etsy’s active buyers jumped 17.60% to 96.30 million as of the period ending in December. It is a touch higher than analysts’ projected 95.60 million.
Accordingly, 37.00% of 2020 new customers came back to make a purchase last year.
At the same time, active sellers significantly edged up 72.00% to reach 7.50 million.
Among the highlights in the quarter, the gross merchandise sales per active seller hit an all-time high of $136.00, a gain of 16.00%.
Moreover, the firm mentioned that the consolidated gross merchandise sales rose 16.50% to a record $4.20 billion.
Etsy explained that the sky-high Q4 GMS performance benefitted from the early and robust kickoff of the holiday season.
Following a record-breaking quarterly report, Etsy announced raising seller transaction fees from 5.00% to 6.50% percent.
The online firm explained that the increase in fees would mostly pay for marketing and seller tools.
Etsy Delivers Weak Guidance
However, Etsy delivered weak guidance for the current quarter, blaming it on strict comparisons with the year-earlier period.
It anticipated its first-quarter revenue between $565.00 million and $590.00 million. The projected figure is lower than the Wall Street estimate of $630.00 million.
Etsy expected its gross merchandise sales to be in the range of $3.20 billion to $3.40 billion, lower than the consensus of $3.50 billion.
At the onset of the pandemic, the digital retailer’s online orders significantly surged.
E-commerce companies have all experienced a revenue lift during the worst months of the coronavirus pandemic.
Nevertheless, investors skidded the lower outlook as they focused instead on the fourth-quarter results.
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