• Etsy shares tumbled after the company posted a mixed first-quarter earnings report.
• Revenue for the quarter beat expectations, but its gross merchandise sales continue to lag year over year.
• The company also took a $101.7 million hit during the quarter as Etsy sold off Reverb, its musical instrument marketplace.

shares plunged on Wednesday after the company mixed results for the first quarter.

Here's how the company did:

• Earnings per share: 46 cents per share adjusted vs. 49 cents expected by LSEG
• Revenue: $651.2 million vs. $643 million expected by LSEG

Shares of Etsy tumbled more than 9% in afternoon trading, as stocks fell broadly after showed a contraction of 0.3%. The data spurred fears the economy was headed toward a recession from President Donald Trump's abrupt policy shifts, primarily around trade.

The e-commerce company reported a net loss of $52.1 million, or a loss of 49 cents per share, compared with a profit of $68 million, or 48 cents per share, a year ago.

Etsy said the results reflected it taking a $101.7 million impairment charge from the sale of Reverb. The company it will sell off the musical instrument marketplace it acquired in 2019 to focus on its core marketplace and secondhand platform Depop, which it bought in 2021.

Revenue for the quarter was up about 1% to $651.2 million, beating analysts' projected $643 million.

Etsy operates an online marketplace that connects buyers and sellers with mostly handcrafted goods. Like many other retailers, the company is digesting the impact of Trump's sweeping tariffs, though CEO Josh Silverman that the company is "vastly less" dependent on products from China, which was hit by aggressive levies of 145%.

Etsy CFO Lanny Baker said Wednesday that the company is "staying nimble in the face of uncertainty" around the tariff announcements and "the fluid state of consumer confidence in our core markets."

The company said it also established a "small operational task force" to address the tariffs, which has provided buyers and sellers with guidance on shipping timelines, along with other information. Earlier this month, Etsy products from domestic sellers on its site as a way for shoppers to circumvent the extra costs associated with Trump's tariffs.

Approximately 90% of sellers source their products domestically, Silverman said on a call with investors.

"We are, of course, monitoring the ricochet impact of higher global tariffs on consumer spending in our core markets, particularly with regard to the cost of items people purchase every day and how this may impact demand for consumer discretionary items," Silverman said.

Gross merchandise sales, a key metric that measures the total volume of goods sold on the platform, fell 6.5% year over year to $2.79 billion, which was in line with consensus estimates, according to FactSet.

For the second quarter, Etsy forecast GMS to decline at a rate similar to or "potentially slightly better than" the 6.5% rate it saw this quarter.

Active sellers on the platform fell 11.3% year over year to nearly 8.1 million, marking four straight quarters of declines. Active buyers also declined for the second consecutive quarter to 94.8 million. Both figures include sellers and buyers across the core Etsy marketplace, Depop and Reverb.

Etsy has been working to strengthen its image as a destination for unique gifts and products as it looks to return to growth and combats a fiercely competitive e-commerce market dominated by  and, more recently, Chinese online retailers Temu, Shein and TikTok Shop.

CORRECTION: This article has been updated to reflect that Etsy's earnings for the quarter were 46 cents per share. A previous version of this story stated an incorrect amount.