ETSY, INC. reported third-quarter revenue that fell short of analysts’ estimates, signaling that the online marketplace for handmade and vintage goods is struggling to accelerate growth amid increased competition.
Third-quarter revenue was $65.7 million, the New York-based company said Tuesday in a statement. While that was up 38% from the prior year, analysts on average were projecting sales of $66.4 million, according to data compiled by Bloomberg. The shares fell as much as 9.3%.
Etsy has been working to boost sales and reverse a stock slump of more than 30% since April amid rising marketing costs and slowing gross merchandise sales (GMS). The company has been spending more on e-mail, mobile ads, search, and other strategies to bring new buyers to the platform. The company also faces increasing competition — Amazon.com, Inc., the world’s largest online retailer, last month unveiled its own handmade-products marketplace.
Third-quarter GMS — the total value of all merchandise sold through the Etsy site — rose 22% to $568.8 million, a deceleration from the 25% growth rate in the prior quarter. GMS growth also decelerated in the three months that ended in June. The online marketplace for handcrafted items such as jewelry, clothing and gifts reported a net loss of $6.89 million, or 6 cents a share, in the recent quarter.
The company last month rolled out same-day delivery through start-up Postmates, Inc. in parts of New York City to tap into consumer demand for faster order fulfillment. Uber Technologies, Inc. and Amazon also offer rush delivery for local products and businesses in some major cities in the US, including New York. Jet.com, Inc., the e-commerce start-up seeking to rival Amazon, is also planning to provide same-day delivery in New York and San Francisco. — Bloomberg
