Key Highlights

● Etsy reported revenue of $692.5 million, above estimates.

● GAAP earnings of $1.00 a share beat forecasts of 74 cents.

● Gross merchandise sales climbed to $2.6 billion.

● Shares touched a new 52-week high during the session.

Etsy (NASDAQ:ETSY) jumped on Wednesday, October 28, hitting a new 52-week high after the online marketplace for handmade and vintage goods delivered a third quarter that topped expectations on both revenue and profit.

The stock was one of the notable gainers across the broader market universe of US-listed companies. Reports differed slightly on the size of the move by the close, but the shares were sharply higher at their morning peak and held a solid gain.

Beating on Both Lines

Etsy reported third-quarter revenue of $692.5 million, well ahead of the $667.3 million analysts had expected, according to market data. Earnings came in at $1.00 a share on a GAAP basis, far above the 74 cents analysts had forecast.

Adjusted EBITDA, a measure of operating profit, reached $210.4 million, beating estimates of $195.9 million. Gross merchandise sales, the total value of goods sold on Etsy's platforms, climbed to $2.6 billion. Revenue grew faster than gross merchandise sales, meaning Etsy is capturing a larger share of each transaction through fees, advertising and services for sellers.

What Etsy Does

Etsy runs online marketplaces that connect millions of independent sellers with buyers looking for handmade, vintage and creative goods. It earns money mainly from transaction fees, payment processing, advertising and subscription services sold to sellers, rather than by holding inventory itself.

Because of that model, gains in take rate and advertising can lift profits even when growth in overall shopping volume is moderate.

Consumer Stocks in a Mixed Tape

The result came during a mixed stretch for consumer stocks. Wendy's (NASDAQ:WEN) soared after a report that Trian had proposed taking the restaurant chain private at $7.35 a share, while PROG Holdings (NYSE:PRG) slid after cutting its annual outlook. Its chief executive, Steve Michaels, said the company is taking a more cautious view of the consumer as it closes out the year.

Sources disagreed on whether the broader consumer discretionary sector finished slightly higher or slightly lower on the day.

What to Watch

The S&P 500 rose 21.38 points to 7,743.98, its third straight gain. Technology and energy led, while utilities and real estate lagged as long-dated Treasury yields climbed.

Thursday's data could matter for consumer-facing stocks. The advance third-quarter GDP estimate and September personal income, spending and PCE inflation data arrive at 8:30 a.m. ET. Amazon (NASDAQ:AMZN), the giant of online retail, reports after Thursday's close, and its commentary on holiday demand will be closely watched across e-commerce.