May 1 (Reuters) - Etsy ( ETSY ) missed Wall Street

expectations for first-quarter gross merchandise sales (GMS) and

profit on Wednesday, hurt by lower demand for its handcrafted

goods and personalized gifts at its online marketplace.

WHY IS IT IMPORTANT?

Despite Etsy ( ETSY ) ramping up spending over the past quarters on

promotions and advertising, it struggled to keep up with larger

retailers in attracting bargain-hungry customers.

It is also facing increasing competition from low-cost

e-commerce platforms such as Temu.

CONTEXT

Persistent inflationary pressures have put off customers

from spending on big-ticket non-essentials product categories

including vintage handicrafts, jewelry and home decor.

KEY QUOTES

"Our first quarter performance ...was pressured by the

challenging environment for consumer discretionary products,

which continues to be a headwind to Etsy ( ETSY ) marketplace growth,"

said CEO Josh Silverman.

"While considerably larger than it was pre-pandemic, Etsy ( ETSY ) is

struggling to find ways to expand beyond its niche and attract

buyers as Amazon and Walmart eat up a larger share of ecommerce

spending," Eachel Wolff, analyst with eMarketer said.

BY THE NUMBERS

For the quarter, the company posted consolidated GMS - a key

metric to measure sales - of $3 billion, compared to analysts'

average estimate of $3.12 billion, according to LSEG data.

The company posted quarterly revenue of $646 million,

roughly below analysts' expectations of $646.3 million. It

earned 48 cents per share, below estimates of 49 cents per

share.

The company's net income for the quarter was $63 million,

compared with $74.5 million last year. Analysts on average

expected $67.39 million, according to LSEG data.

MARKET REACTION

Shares of the company, which fell nearly 32% in 2023, were

down nearly 14% in trading after the bell.