Etsy raises 2018 revenue forecast, transaction fee; shares surge
today Jun 14, 2018
Etsy Inc on Thursday raised its full-year revenue growth forecast and increased its transaction fee for sellers, sending the e-commerce company’s shares up more than 19 percent in premarket trading.
Etsy expects revenue growth of 32 percent to 34 percent in 2018, up from its previous forecast of 22 percent to 24 percent. It also raised the higher end of its gross merchandise sales growth range.
Etsy said it would increase the transaction fee it charges when a seller makes a sale to 5 percent from 3.5 percent. The new fee would apply to the cost of shipping.
The company said it plans to increase direct marketing spending by at least 40 percent in 2018 and revamp community platforms.
Etsy’s share movement was in contrast to arts and crafts specialty retailer Michaels Companies Inc, which dropped 16 percent after it expected flat comparable sales in the second quarter and comparable sales between 0-1.5 pct in fiscal 2018.
Michaels also forecast adjusted earnings per share of 12 cents to 14 cents, below analysts’ estimates of 19 cents per share, according to Thomson Reuters I/B/E/S.
Shares of Etsy were trading up at $39.32. The company’s shares have more than doubled in the last 12 months.
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