Etsy is crashing

Etsy reported a quarterly loss on Tuesday evening, and the stock is getting crushed.

In after-hours trading, the stock fell by more than 11% after closing down 6% at $US19.23 a share.

The online marketplace for craft makers reported a second-quarter loss of $US6.4 million, or $US0.07 per share, ahead of the consensus estimate for -$US0.08.

Revenues rose 44.4% year-over-year to $US61.4 million, more than the estimate for $US59.57 million according to Bloomberg. This growth rate was the slowest the company has ever reported.

In the earnings release, Etsy said weaker foreign currencies continued to reduce demand for dollar-denominated products. As much as 9% of its Gross Merchandise Sales (GMS) are from goods not listed in US dollars, the company said. Without the foreign currency impact, GMS would have increased 26.5%, compared to the 24.6% growth witnessed.

The company expects this currency hit to continue into the third quarter. It also plans to boost its staff and spend more on marketing, and these are expected to impact how it performs.

In the earnings release, CEO Chad Dickerson said, “at the end of the second quarter of 2015, our loyal and engaged community included nearly 1.5 million active sellers and 21.7 million active buyers who drove more than $US1 billion in GMS during the first half of the year.”

Etsy’s stock has been on the decline and it’s now down 36% from the April IPO.

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