July 31 (Reuters) - Etsy ( ETSY ) beat Wall Street

expectations for second-quarter revenue and gross merchandise

sales on Wednesday, helped by steady demand for personalized

gifts at its online marketplace.

WHY IT'S IMPORTANT

Aggressive investments in marketing and advertising have

helped attract more customers to Etsy's ( ETSY ) platform, while

occasions such as Mother's Day and Father's Day as well as

graduation ceremonies boosted gift sales.

The company reported a 4.1% year-over-year rise in its

gifting gross merchandise sales.

The number of Etsy's ( ETSY ) active buyers rose 0.4% to 96.6 million

in the quarter ended June 30, while the number of active sellers

rose 5.9% to 8.8 million.

CONTEXT

Although special occasions supported Etsy's ( ETSY ) gifting

business, steep costs of living are squeezing household budgets,

making consumers more picky while shopping for non-essential

items such as vintage handicrafts, furniture, apparel, and

luxury items like jewelry.

KEY QUOTE

"Etsy ( ETSY ) will remain challenged to meaningfully grow its seller

base as well as active buyers who purchase frequently given

consumers' shift towards lower-cost alternatives and new retail

players like Temu and TikTok Shop," said Sky Canaves, analyst

from eMarketer.

MARKET REACTION

Shares of the company were marginally up in volatile trading

after the bell.

BY THE NUMBERS

For the quarter, the company posted consolidated gross

merchandise sales - a key metric to measure sales - of $2.95

billion, compared with analysts' average estimate of $2.81

billion, according to LSEG data.

Its quarterly revenue of $647.8 million beat expectations of

$629.6 million. The company earned 41 cents per share, below

estimates of 45 cents.

Etsy's ( ETSY ) net income for the quarter was $53 million, compared

with $61.9 million a year ago. Analysts on average expected

$59.9 million.