By Granth Vanaik
(Reuters) -Etsy Inc on Wednesday beat estimates for quarterly revenue on steady demand for bags, party products and personalized gifts on its online marketplace, sending the company's shares up more than 5% in extended trading.
The company, a platform for sellers of handmade or vintage items, has remained popular with cost-conscious consumers after a pandemic-led spurt in growth when people shopped for cloth masks and craft supplies.
"Shoppers are coming to us more frequently and spending more with Etsy (NASDAQ:ETSY)," said Chief Executive Officer Joshua Silverman on a post-earnings call, adding the company is continuing to build the "Etsy habit."
Net revenue in the quarter ended Dec. 31 jumped 12.6% to $807.2 million for Etsy, compared with analysts' expectation of $751.8 million, according to Refinitiv.
"Despite concerns about weaker consumer discretionary spending as well as the shift in consumer spending to services over goods, ETSY produced strong revenue growth and better-than-expected gross merchandise sales (GMS (NYSE:GMS))," said Arun Sundaram, analyst at CFRA Research.
Still, GMS, a key industry metric, fell 4% to $4 billion in the reported quarter from a year earlier as spending on non-essential items slowed under the threat of a recession. For the current quarter ending March, Etsy expects GMS to be in the range of $2.95 billion to $3.15 billion.
The company forecast revenue between $600 million and $640 million for the January-March period, compared with analysts' expectation of $621.6 million.
Last week, short seller Citron Research alleged that Etsy had become one of the largest platforms in the world for counterfeit goods, sending its shares down more than 8%.
Etsy, in response, had said that counterfeit items were prohibited on the platform.
CEO Silverman on Wednesday offered more defense against the allegations on a post-earnings call, detailing investments and safety measures to keep fraud sellers off the platform.