EBay Inc. anticipates a challenging holiday season as it projects revenue below estimates, signaling ongoing struggles against industry giants like Amazon.com Inc. and Walmart Inc. The company predicts earnings per share between $1 and $1.05 on revenue ranging from $2.47 billion to $2.53 billion for the December-ending quarter. Analysts had projected a profit of $1.05 per share on sales reaching $2.6 billion.
Following this announcement, EBay’s stock experienced a 6% decline in after-market trading. Year-to-date, the shares were down nearly 2%, in contrast to the S&P 500’s 14% gain through Tuesday’s close.
Despite the growth in overall online spending in the U.S., EBay, headquartered in San Jose, California, has been consistently losing market share. CEO Jamie Iannone is implementing strategies such as focusing on selling luxury items like watches and refurbished products to attract cost-conscious shoppers. The company also recently opened a collectible sneaker store in Manhattan, aiming to appeal to streetwear enthusiasts by authenticating coveted brands and addressing concerns about counterfeit items.
For the third quarter, EBay reported a profit of $1.03 per share on sales of $2.5 billion, aligning closely with analyst estimates. The gross merchandise volume, representing the value of all goods sold on EBay, increased by 2% to reach $18 billion in the quarter, surpassing the average analyst estimate of $17.8 billion. However, the number of active buyers decreased by 3% to 132 million compared to the previous year.
Advertising revenue, totaling $366 million, narrowly missed analysts’ expectations of $368 million. EBay has been intensifying efforts to create additional advertising and payment products for merchants to offset the sluggish growth in consumer spending on the platform.
