EBay’s focus on luxury to refurbished goods drives results beat
EBay Inc’s quarterly results beat Wall Street targets on Wednesday as inflation-wary shoppers snapped up refurbished goods and the ecommerce platform reaped the benefits of expanding its luxury offerings.
The company still forecast holiday-quarter revenue slightly below estimates, but investors looked past that to drive up its shares nearly 8 per cent in extended trading.
“As consumers in our major markets face persistent inflation, higher interest rates and rising home energy costs, they are increasingly turning to eBay for better value,” eBay Chief Executive Jamie Iannone told analysts.
Ebay has expanded the categories on its platform to offer pre-owned sneakers and jewelry as it looks to tap steady demand from diehard collectors of high-value souvenirs such as electronics, trading cards and watches.
Still, executives warned of uncertainties including a strong U.S. dollar, Europe’s worsening energy crisis and weak consumer confidence ahead of the holiday shopping season.
The energy crisis has pushed up demand for home energy products in Germany though, they said, due to rising utility prices and uncertainty around energy availability.
“EBay still has risk from their ‘enthusiast’ buyer base reducing spend in their top categories, and eBay still has substantial international exposure… but eBay has just set a much lower bar and already trades at a substantial discount,” Benchmark analyst Daniel Kurnos said.
The company’s stock has lost about 40 per cent this year.
The midpoint of eBay’s holiday-quarter revenue forecast of $2.42 billion to $2.50 billion came in slightly below analysts’ expectations of $2.49 billion, according to Refinitiv data. Its adjusted profit estimate was in-line.
Retail industry bellwether Amazon.com Inc had also signaled a dour holiday season as this year’s surge in prices of food, gas and other essentials forced cash-strapped consumers to put casual shopping on the back burner.
Third-quarter revenue fell 5 per cent to $2.4 billion, but surpassed estimates of $2.32 billion. On an adjusted basis, per-share profit of $1 was 7 cents higher than estimates.
- Reporting by Nivedita Balu in Bengaluru; Editing by Devika Syamnath, of Reuters.