Etsy Inc. tumbled after reporting 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.
Etsy shares fell 9.6 percent to $9.97 at the close Wednesday in New York, its lowest price since going public at $16 in April.
Third-quarter revenue was $65.7 million, the Brooklyn, New York-based company said late Tuesday in a statement. While that was up 38 percent from the prior year, analysts on average were projecting sales of $66.4 million, according to data compiled by Bloomberg.
Etsy has been working to boost sales and reverse a stock slump of more than 30 percent since April amid rising marketing costs and slowing gross merchandise sales, or 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 percent to $568.8 million, a deceleration from the 25 percent 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.
“Currency exchange rates, however, have continued to directly and indirectly affect Etsy’s overall GMS growth rates and percent international GMS,” Kristina Salen, the chief financial officer, said Tuesday on a conference call.
The company last month rolled out same-day delivery through startup 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 U.S., including New York. Jet.com Inc., the e-commerce startup seeking to rival Amazon, is also planning to provide same-day delivery in New York and San Francisco.