Strong US holiday spending boosts Ebay’s top line

Reuters

28th Feb 2024

E-commerce platform Ebay beat market expectations for quarterly revenue and profit, helped by healthy consumer spending during the holiday season and strength in its focus categories such as refurbished goods and auto parts.

Shares of the company rose around 4 per cent in extended trading.

Ebay’s board of directors also authorised an additional US$2 billion share repurchase program.

“We started to see our business improve towards the end of November, particularly in the US, driven by consumers looking for value to stretch their limited holiday budgets,” Ebay CFO Stephen Priest said in a post-earnings call.

The upbeat results show that Ebay’s marketplace, which serves as a hub for buyers and sellers from around the world, is expected to benefit as consumers loosen budgets and spend heavily amid an easing economy.

The company reported revenue of $2.56 billion, beating analysts’ average estimate of $2.51 billion, according to LSEG data.

It reported adjusted profit per share of $1.07, compared with an estimate of $1.03 per share.

However, Ebay CEO Jamie Iannone flagged weakness in UK and Germany, saying the latter was experiencing negative e-commerce growth.

The company slashed about 1000 roles, or an estimated 9 per cent of its workforce last month, joining rival e-commerce giant Amazon.com and other tech firms as the industry braces for an uncertain economy.

It expects revenue for the first quarter to be in the range of $2.50 billion to $2.54 billion, compared to analysts’ estimate of $2.54 billion.

The firm also forecast adjusted earnings between $1.19 per share and $1.23 per share, above the estimate of $1.13 per share.

Gross merchandise volume, a key industry gauge that denotes the total volume of goods and services sold on the marketplace, rose 2 per cent, to $18.59 billion in the fourth quarter, up from $18.23 billion a year ago.

• Reporting by Zaheer Kachwala in Bengaluru; Editing by Pooja Desai, of Reuters.