Online marketplace Etsy recently reported first-quarter revenue numbers that exceeded Wall Street’s expectations, providing a glimmer of hope amid broader economic uncertainty. Many consumers are still shopping for unique gifts and handcrafted items, a trend that remained steady over the past few months, especially with the addition of its resale apparel platform, Depop.
The first quarter saw a diverse range of purchases on the platform, from delicate demi-fine jewelry to stylish home decor. Shoppers are increasingly turning to Etsy for these personalized and unique products, even as the retail industry braces for challenges, largely due to rising tariffs on imported goods, particularly from countries like Canada and China. President Trump’s tariffs have complicated the economic landscape, raising concerns about increasing costs of living in the U.S. as businesses adjust to potentially higher production expenses.
Fortunately for Etsy, most of its merchandise is either sourced locally or comes from European suppliers, providing a buffer against the worst impacts of these tariffs. However, any future taxes levied on goods from the European Union could still impact prices for their products. After the earnings report, shares of Etsy rose nearly 1% in premarket trading, reflecting some investor confidence despite the uncertain market.
In April, Etsy announced it was selling off its musical instrument marketplace, Reverb. That decision is set to close in the coming months, but it came with a cost: a quarterly net loss of $52.1 million, or 49 cents per share, a stark contrast to the profit of $63 million—or 48 cents per share—reported a year earlier. This loss was significantly impacted by a substantial impairment charge of $101.7 million related to the goodwill of Reverb.
Investment firm Bernstein highlighted that focusing on Etsy’s core business may be the right strategy during this time. As the platform looks to regain its footing and boost gross merchandise sales (GMS) growth, it’s clear that maintaining focus on their foundational strengths is crucial. The company’s consolidated GMS, a critical metric for measuring sales, stood at $2.79 billion this quarter, down from $2.99 billion a year prior.
Looking ahead, Etsy has projected that second-quarter GMS will likely decline at a comparable rate—or possibly just slightly better—than in the first quarter. However, the company’s revenue did show a slight increase of about 1%, totaling $651.2 million, which surpassed analysts’ expectations of $642.7 million.
For consumers, this means Etsy continues to be a reliable source for unique, handcrafted goods at a time when many may be more cautious about spending. As they navigate these uncertain economic waters, shoppers can still cherish the personal touch that Etsy’s offerings bring into their lives. Whether it’s finding the perfect gift for a friend or adding a unique piece to their home, Etsy persists as a go-to destination for those seeking something special.
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