EBay’s higher investments weigh on profit forecast, shares fall
EBAY forecast third-quarter profit below market expectations on Thursday (Jul 27) as the e-commerce platform spent more to bolster categories such as auto parts, refurbished goods and collectibles, sending its shares down 4.5 per cent after the bell.
The company had in June acquired Certilogo, a provider of AI-powered apparel authentication, and bought trading cards marketplace TCGplayer last year.
To attract more Gen Z buyers, it also launched its streetwear vertical in June as an add-on to its sneakers category.
Investors are concerned about its profitability guidance as the company’s costs rise due to its efforts to improve authentication of goods on the platform, said DA Davidson & Co analyst Tom Forte.
The company forecast third-quarter profit to be between 96 US cents and US$1.01 per share, compared to analysts’ estimates of US$1.02, according to Refinitiv data.
While eBay attracts price-conscious customers due to its secondhand products vertical, it faces competition from larger online retailers including Amazon.com and Shopify.
Gross merchandise value, a key industry metric that denotes the total value of goods and services sold on the marketplace, fell 2 per cent, to US$18.2 billion in the second quarter.
The company forecast third-quarter revenue in the range of US$2.46 billion and US$2.52 billion, compared to analysts’ average estimates of US$2.47 billion.
Revenue in the quarter ended Jun 30 was US$2.54 billion, compared to expectations of US$2.51 billion. REUTERS
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