A sign is posted in front of eBay’s headquarters in San Jose, California.
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eBay shares fell about 9% in after-hours trading on Wednesday after the online marketplace’s fourth-quarter outlook fell short of Wall Street expectations.
The company’s third quarter results are as follows:
Earnings: $1.19 per share vs. LSEGR’s estimate of $1.18 per share Earnings: $2.58 billion vs. LSEG’s estimate of $2.55 billion
eBay expects sales for the current quarter to be between $2.53 billion and $2.59 billion, representing a decline of 1% to an increase of 1% year-over-year. The outlook was below analysts’ average estimate of fourth-quarter sales of $2.65 billion, according to Street Accounts.
The company also said it expects fourth-quarter adjusted earnings per share to be between $1.17 and $1.22. The high end of the range is in line with the consensus estimate of $1.22 per share.
EBay faces increasing competition in e-commerce from rivals such as Amazon, Walmart and Etsy, as well as low-cost startups Temu and Shein with ties to China. To keep buyers and sellers coming back to its site, the company is focusing on so-called “focus categories” such as collectible sneakers, used luxury goods and auto parts. The company also announced artificial intelligence tools that provide shoppers with personalized recommendations and streamline seller list creation.
In an interview after the company’s earnings report, eBay CEO Jamie Iannone said the weak outlook was due to a number of “temporary factors.” He cited the spread of hurricanes earlier in the quarter and the distraction of shoppers ahead of the U.S. presidential election in November. He also pointed out that the holiday shopping season is shorter this year, with five fewer days between Thanksgiving and Christmas than last year.
Uncertain weather and election distractions are expected to be top concerns among holiday shoppers this year, according to a recent Deloitte survey. Amazon cited similar factors behind its weaker-than-expected outlook in its latest earnings report. Amazon will report its third quarter results on Thursday.
Iannone said that despite the tough macroeconomic environment, eBay is gaining traction among shoppers, adding that consumers are able to “buy used and refurbished items and find great value, making them difficult to find.” “It tends to be even more beneficial during periods of change.”
“If you look at our trajectory and our momentum, we’re exactly where we expected to be,” Iannone said. “I feel really good.”
Steve Priest, eBay’s head of finance, said the company is “robustly executing” on its strategic initiatives, which continue to drive “gross volume growth in a dynamic macro environment.” Ta.
According to eBay, GMV, or the dollar value of goods sold on eBay’s marketplace, rose 2% year over year to $18.3 billion. That exceeded analysts’ expectations of $18.1 billion, according to estimates from Street Accounts.
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