Etsy posts surprise Q2 profit
Online artisanal marketplace Etsy posted a surprise profit as part of its second quarter financial results.
The Brooklyn-based crafts vendor posted a Q2 net income of 10 cents a share, or $11.7 million, reversing a net loss of 6 cents a share, or $7.3 million, a year ago. Revenue was $101.7 million, up 19 percent from the previous year.
Wall Street was expecting an earnings loss of 2 a share on revenue of $101.1 million.
Etsy's shares climbed as much as 6 percent in after-hours trading following the report.
Etsy ended the quarter with just more than 30 million active buyers, up from 26 million in 2016. The increase in active buyers shows that Etsy is standing its ground amidst competition from Amazon Handmade, the e-commerce giant's own specialized marketplace for handicrafts launched in 2015.
The company said its Gross Merchandise Sales (GMS) were $748.0 million, up 11.7 percent year over year. Etsy said the GMS increase was supported in growth of its active seller and buyer bases.
Etsy claims that it has created a more nimble cost structure following a series of layoffs earlier this year. The layoffs helped Etsy identify about $20 million in 2017 expense reductions, which it expects will result in $35 million in annualized cost savings.
"Since May, we have sharpened our focus and increased the velocity of product experiments and launches, which together, we believe will enable us to accelerate GMS growth in the third quarter compared to the second quarter," said Etsy's newly appointed CEO Josh Silverman.
"We are doubling down on our core Etsy.com market and, while it's still early, the initiatives we have underway are already having a positive impact on GMS."