Etsy’s 30% Surge, Explained

Etsy’s 30% Surge, Explained

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by: Jayson Derrick, Benzinga Staff Writer

 

Shares of Etsy Inc ETSY 33.52% soared higher by 30 percent Thursday morning after introducing new tools for sellers, a higher transaction fee and lifted guidance.

 

 

What Happened

Etsy announced a new subscription package and improved tools designed to support sellers at different stages of growth, the company said in a press release. As of mid-July, sellers can make use of a new "Etsy Plus" platform for $10 a month that offers tools like advanced shop customization options, targeted restock notifications and discounts on promotional material.

A separate "Etsy Premium" premium will be available in 2019 and include more advanced management tools.

Etsy confirmed the fee it charges sellers per transaction will increase from 3.5 percent to 5 percent and will also apply to the cost of shipping, the company said. The increased costs will be allocated for incremental investments in marketing to attract buyers, improve customer support and drive product innovation.

 

 

Why It's Important

"Empowering creative entrepreneurs is at the heart of Etsy's mission to keep commerce human," Etsy CEO Josh Silverman said in a statement.

"Our 2 million active sellers have individual business goals and aspirations, and we want to support them no matter where they are on their journey. By listening to the needs of our sellers, we designed our new subscription packages with a combination of tools to help them succeed at each phase of their business lifecycle."

 

 

What's Next

Etsy expects its new initiatives to grow its gross merchandise sales from 16-18 percent to a new range of 16-19 percent. Revenue growth guidance was lifted from 22-24 percent to 32-34 percent, while Etsy's adjusted EBITDA margin guidance of 21-23 percent was left unchanged.

 

 

 

Photo courtesy of Etsy. 

© 2018 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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