EBay lowers estimates on lower consumer spending

Yuvraj Malik

3rd May 2024

E-commerce firm Ebay forecasted second-quarter revenue below Wall Street estimates on Wednesday, as demand cools for its key product categories like collector’s items and auto parts, sending shares down 5 per cent in extended trading.

The San Jose, California-based company has been under pressure as inflation-hit shoppers are becoming increasingly choosy about their online purchases, as well as competition from larger platforms like Amazon.

It expects revenue in the range of $2.49 billion to $2.54 billion for the quarter ending June. Analysts on average were expecting $2.56 billion, according to LSEG data.

The company forecast adjusted per-share earnings of $1.10 to $1.15, the mid-point of which came in below analysts estimate of $1.14.

With bigger e-commerce platforms gaining the lion’s share of the market, Ebay re-oriented itself in recent years and scaled offerings in the so-called “focus categories” such as luxury bags and watches, refurbished electronics and auto parts and accessories.

In 2022, Ebay bought trading cards marketplace TCGplayer for $295 million to scale the collectible cards category. It also started services to authenticate luxury and collectible items.

Revenue in the most recent quarter ended March 31 rose 2 per cent to $2.56 billion, slightly above analysts’ estimate of $2.53 billion. Adjusted per-share earnings of $1.25 came in higher than analyst estimates of $1.20.

Gross merchandise volume, a key industry gauge that denotes the total value of goods and services sold on the marketplace, rose 1 per cent to $18.62 billion.

Active buyers remained steady at 132 million as of March-end. The company defines active buyers as customers who paid for a transaction on Ebay within the previous 12-month period.

• Reporting by Yuvraj Malik in Bengaluru; Editing by Tasim Zahid, of Reuters.