Etsy Inc. said Wednesday that sales of face masks on its e-commerce site led to huge growth in April sales, but first-quarter earnings disappointed investors and shares fell 8% in after-hours trading. Etsy reported profit of $12.5 million, or 10 cents a share, down from 24 cents a share a year ago and shy of the average analyst estimate of 18 cents a share, according to FactSet. The company's revenue reached $228.1 million, up from $169.4 million and ahead of the analyst consensus of $220.2 million. But the company projected much bigger returns in the second quarter, thanks to sales of face masks by Etsy sellers. "After a volatile March, Etsy experienced a dramatic shift in demand during the month of April as global buyers turned to Etsy for cloth face masks given updated guidelines to slow the spread of COVID-19," the company disclosed in its announcement, which said that gross merchandise sales jumped 130% in April after increasing 32.2% in the first quarter. Etsy forecast second-quarter revenue of $310 million to $340 million, which would be sales growth of up to 90% and trounces the analyst consensus for second-quarter sales of $213.5 million. Etsy shares had more than doubled since the end of March on expectations for online commerce during the COVID-19 pandemic, and closed 7.5% higher Wednesday at a record high of $78.24 before falling in extended trading.
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