Etsy has smashed analysts’ estimates in its first quarter seeing revenue jump 141 per cent, but investors shunned the marketplace amid warnings of slowing growth.
The online marketplace saw shares drop as much as nine per cent in after-hours trading last night, despite it reported revenues of $551 million for the period, comfortably above consensus estimates of $530 million.
Gross merchandise sales, a measure of the total value of goods sold on the site, also skyrocketed 132 per cent to $3.1 billion once again coming well above expectations of $3.04 billion.
This helped boost profits, seeing EBITDA rise 33 per cent and earnings per share hit $1, above expectations of 97 cents.
However, like its rival Ebay, investors were concerned that this pandemic-driven boom would be hard to maintain in the coming months as lockdowns eased, non-essential retail reopens and stimulus checks run dry.
Etsy’s chief executive Josh Silverman warned that the company “currently expect Q2 2021 GMS to decelerate along with the rest of e-commerce as we lap the tremendous 2020 growth rates.
“That said, we’ll keep the pedal to the metal in 2021 to continue to improve our customer experiences, make Etsy top-of-mind for the millions of buyers who have found Etsy for the first time or are relying on us now more than ever, and further invest in our very large market opportunity.”
The retailer projected revenue growth of between 15 and 25 per cent over the coming quarter, alongside gross merchandise sales growth of between five and 15 per cent.
This is a sharp slowdown from the triple-digit growth figures seen during its first quarter and throughout most of 2020.
In further signs the company’s explosive growth could be coming to an end Etsy’s mask sales, which provided a lifeline for the it during the early stages of lockdown, dropped from highs of $346 million in the second quarter of last year to $72 million.