eBay, Etsy’s earnings in the first quarter of 2022 reflect the e-commerce crisis

An employee walks past a quilt showing Etsy Inc. signage at the company’s Brooklyn headquarters.

Victor J Blue / Bloomberg via Getty Images

Etsy Other Ebay reported better than expected Q1 results after Wednesday’s bell, but companies have provided weak indications for the current quarter that suggest the e-commerce sector is cooling down after a pandemic-fueled push.

Shares of eBay fell more than 6% in extended trading, while Etsy’s shares plummeted as much as 11%.

Here’s how Etsy did it, compared to the expectations of the analysts interviewed by Refinitiv:

  • Earning per share: 60 cents against 60 cents expected
  • Income: $ 579 million versus $ 575 million

And here’s how eBay did it, compared to the expectations of the analysts interviewed by Refinitiv:

  • Earning per share: $ 1.05 adjusted versus $ 1.03 expected
  • Income: $ 2.48 billion versus $ 2.46 billion

Etsy and eBay are grappling with growing concerns that ecommerce companies will not be able to sustain the high-flying growth they enjoyed during the coronavirus pandemic. During the pandemic, e-commerce companies across the board resumed business, which benefited from their growth rates and raised share prices.

After two years of massive growth, investors are bracing for a slowdown, especially as the economy continues to reopen and consumers return to the shops.

Even Amazon, which saw its business expand at a breakneck pace during the pandemic, was not immune from the resurgence of e-commerce. The company last week he warned could see its third consecutive quarter of single-digit revenue growth, with revenue forecast to grow between 3% and 7% over the current period.

Etsy saw its sales only increase 5.2% from a year ago, marking the first time that revenue has grown in single digits. EBay’s revenue fell 17.9% year-over-year to $ 2.48 billion.

Etsy said it expects second-quarter revenue to come in between $ 540 million and $ 590 million, which is less than the $ 628 million forecast by analysts, according to StreetAccount. According to StreetAccount, gross merchandise sales during the quarter are expected to be between $ 2.9 billion and $ 3.2 billion, while analysts forecast GMS of $ 3.4 billion.

Etsy CEO Josh Silverman blamed the guide on difficult comparisons about the pandemic era, but said he remained optimistic about the company’s sustained long-term growth potential.

“We are emerging from an unprecedented period and in that Etsy has experienced unprecedented growth,” Silverman said in a statement. “In a world of so many more choices, our guide implies a middle ground between dropping low and high single digits for Etsy’s GMS market year after year, while retaining over 90% of the earnings we’ve made in the past. 2 years. Despite the short-term uncertainty, we have ample reason to remain very optimistic in the long term. “

EBay expects second quarter revenue to be between $ 2.35 billion and $ 2.4 billion, implying a slowdown from 9% to 7% year-over-year. Wall Street has forecast second-quarter revenue of $ 2.54 billion, according to StreetAccount.

The company also provided a weak earnings forecast for the current quarter. He said he expects 87 cents to 91 cents of adjusted earnings per share, while analysts were expecting $ 1.01 per share, according to StreetAccount.

Watch CNBC’s full interview with Etsy CEO Josh Silverman

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