EBay forecasts bleak quarter as online shopping frenzy wanes

The eBay app is viewed on a smartphone in this illustration taken, July 13, 2021. REUTERS/Dado Ruvic/Illustration

Feb 23 (Reuters) – EBay Inc (EBAY.O) on Wednesday forecast bleak to start with-quarter effects, as the e-commerce system tackles waning on-line desire, stiff levels of competition and world supply chain disruptions, sending the company’s shares down just about 9% in prolonged trading.

E-commerce businesses raked in huge revenue as on the internet procuring boomed last 12 months for the duration of the pandemic, but vaccine rollouts could spell trouble as people return to brick-and-mortar shopping.

Largest rival and on the web retail big Amazon.com Inc has also forecast disappointing first-quarter sales estimates. read through much more

EBay, which is presently grappling with declining active consumers, expects a additional strike as ramping up investments set force on its margins.

“The second quarter should really mark the lower stage for margins in the course of the calendar year as we lap complicated comps and ramp up our tempo of expenditure,” finance chief Stephen Priest explained in a publish-earnings convention call.

Shares of eBay, which started off as a web site the place individuals would auction their collectibles, fell to $50.28 in prolonged buying and selling on Wednesday. They declined 18% so far this yr, while the broader S&P Index (.SPX) slipped 11%.

EBay expects initial-quarter adjusted revenue in the array of $1.01 to $1.05 on profits of $2.43 billion to $2.48 billion each estimates came in below Wall Street’s expectations.

The firm’s 2022 revenue and earnings forecasts were being also beneath anticipations.

In the meantime, eBay posted an modified income of $1.05 for each share on income of $2.61 billion in the fourth quarter ended Dec. 31, above analysts’ average estimates, according to IBES facts from Refinitiv.

Part of eBay’s income comes from advertising on its system which crossed $1 billion past 12 months, the enterprise mentioned.

Having said that, gross merchandise volume, the complete greenback price of sales on eBay from which the enterprise takes a percentage, fell 10% to $20.7 billion.

Once-a-year active consumers on eBay also declined 9% to 147 million in the quarter, the organization explained.

Reporting by Eva Mathews in Bengaluru Modifying by Shinjini Ganguli

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