Etsy (ETSY -1.68%) has become a go-to shopping site for consumers during the pandemic. Its unique and handcrafted goods, especially face coverings, have brought millions to its website. As brick-and-mortar retailers welcome shoppers back in stores, investors may be wondering whether these new Etsy customers will stick around. On a Fool Live episode recorded on May 12, contributors Brian Stoffel and Brian Withers go over the most recent quarterly results and discuss the data that shows its customers are staying, and buying more.

10 stocks we like better than Etsy
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Etsy wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks


*Stock Advisor returns as of May 11, 2021


Brian Withers: Etsy has had tremendous tailwinds from the pandemic as people have gone online to look for gifts or just everyday household supplies. Throughout this, Etsy has been quietly building a loyal customer base, setting it up for long-term growth.

Masks sales are down to only 2.5% of gross merchandise sales last quarter, so it's really, really a small fraction of what they're seeing on the platform. But active buyers who've made one purchase in the last 12 months was up 91% to 90 million, repeat buyers up 114%. They added almost 10 million new buyers in the quarter and habitual buyers that have purchased on six or more days over the past 12 months tripled to almost 8 million. Sales on the platform is up 132%, revenue was up even more at 142%, meaning that the company is getting more from every sale on the platform. Gross profit even better, up 180%, says that they're scaling the business. Their net income is up more than tenfold increase year over year. Active sellers on the platform up to 67% to 4.5 million. International is becoming a real staple for the business, it's up to 42% versus 36% last Q1.

I love that buyers and sellers are more deeply embedded into this platform, buyers trailing-12-months purchases is up to $124 per buyer, that's up 20%, and sellers are up to about 2,500 bucks, that's up to 34%. So pretty impressive. The take rate that the company is seeing is 17.5% with all its add-ons with optional advertising, payments and other services. The outlook is 15%-25% growth in the next quarter, and that's what got scared off with investors in the markets yawning with the stock down 17% over the last week, but I love this report.

Brian Stoffel: I did, too. I'm an Etsy shareholder, I loved it. But my question is, what evidence in any, where you talked about habitual buyers just exploding, but do we have any evidence that the people that came to Etsy to buy masks are staying to buy other things?

Withers: That's really a great question, Brian. There's two things that I found from the report that the evidence says yes. They've added 43.5 million new buyers in the last four quarters, and over that same period, the company has seen an increase in repeat buyers of 19.4 million, so about 45%. This isn't a one-for-one necessarily, but 45% of the new people that they've added potentially turned into repeat buyers.

The other pieces of the sales from masks have dropped from 14% in Q2, [20]20 down to 2.5%. At the same time, over the last couple of quarters, non-mask sales have grown 118% and 138% in the last two quarters. It really looks like to me that buyers were coming and discovering Etsy over this past year and have stuck around and many of their top categories have doubled in their sales over the past year.