Etsy, With Record Revenue, Gains Ground With Men

A slowed economy may be stressing consumers out about some kinds of discretionary shopping, but not at Etsy. The online marketplace posted results that beat expectations, including record revenue. And in a twist that shows how the Brooklyn-based company continues to broaden its appeal beyond pandemic masks and Christmas ornaments, it says a quarter of its customers are now men.

“While once tagged a temporary pandemic winner, Etsy continues to show sustainability,” writes Jason Helfstein, an analyst who follows Etsy for Oppenheimer. “Despite reopening and shift to services headwind, revenue increased 13% year over year, reflecting value to seller community and destination to consumers.”

Oppenheimer continues to rate Etsy as likely to outperform its peers.

Consolidated revenue reached a record $807.2 million, up 13% year-over-year, while consolidated gross merchandise sales fell 4%. Net income dropped to $109.5 million, compared to $161.6 million in the prior-year period.



"Despite significant macroeconomic headwinds, we maintained the vast majority of our pandemic gains and delivered double digit revenue growth and excellent profitability for the year,” said Josh Silverman, chief executive officer, in its announcement.

Etsy credited marketing with some of its gains. That includes new brand campaigns it debuted in the U.S., U.K. and Germany.  Refined performance marketing techniques allowed it to spend more during critical periods, which drove gains in new buyer engagement in 13 non-core markets. “During the fourth quarter, approximately 58% of paid GMS in these countries came from new buyers."

The company said it had an exceptionally strong performance on Small Business Saturday and Giving Tuesday, “which we believe indicates that buyers associate Etsy with shopping small and making a positive impact with their purchases," said Silverman.

The results underscore how Etsy has continued to broaden its appeal. “It would be hard to identify a marketplace with a heavier discretionary skew than Etsy,” writes Sean Dunlop, an analyst who follows the company for Morningstar. That makes its “sequential acceleration in core marketplace platform sales growth relative to before the pandemic (to 145% in the fourth quarter from 134% in the third) impressive.”

Dunlop points out, however, that a sharp slowdown in February sales show it’s not immune to macroeconomic pressures. “The craft marketplace isn't through the woods yet,” he says. “However, we remain confident in our long-term forecast.”

He is also encouraged by the news that Etsy now has 22 million active male buyers, roughly a quarter of its base. “The ability to better cater to an extra half of the global population should meaningfully expand the firm's addressable market, even if those users' visits skew toward special occasions and gifting.”

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