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News / Business

EBay gives outlook suggesting sales comeback will take longer

By Spencer Soper, Bloomberg News
Published: February 23, 2023, 8:26am

EBay Inc. warned investors that sales will continue to decline into the second half of the year, raising questions about management’s ability to revive growth at the online marketplace now that a pandemic boom has petered out. The shares declined in extended trading.

The e-commerce company said it had 134 million active buyers in the period ended Dec. 31, a drop of 9% from a year earlier and the seventh straight quarter of declines. Gross merchandise volume, the value of all goods sold on the site, dropped 12% to $18.2 billion in the holiday quarter, also the seventh consecutive period the number had dropped.

“EBay is back to where it was before the pandemic, losing customers and declining sales,” said Brian Yarbrough, an analyst at Edward Jones & Co. Investors question if managers can turn it around, he said. “Unless you’re looking for an odd item, eBay is forgotten by most consumers. You just don’t hear a lot about it the way you do the Walmarts, Targets and Amazons of the world.”

The outlook for the current quarter was in-line with expectations. Revenue will be $2.46 billion to $2.5 billion in the period ending in March, or about the same as a year earlier. In the fourth quarter, sales fell 3.9% to $2.51 billion. Profit, excluding some items, was $1.07 a share. Analysts, on average, estimated profit of $1.06 a share on revenue of $2.47 billion.

Chief Executive Officer Jamie Iannone is trying to reduce expenses to align with declining sales. Earlier this month, eBay announced it would cut about 500 employees, or 4% of its workforce.

The company is aiming to sell more luxury items like watches to boost revenue while also offering refurbished items to appeal to price-conscious shoppers. In an effort to lure collectors, eBay provides a service to trade and authenticate trading cards and other items and has been building climate-controlled vaults to store them.

Advertising, driven by “promoted listings,” gained 19% to $276 million in the quarter, the San Jose, California-based company said Wednesday in a statement.

EBay shares fell about 4.5% in extended trading after closing at $47.85 in New York. The stock has gained about 15% this year, after dropping 38% in 2022.

Earlier this month, Amazon.com Inc. reported that its core online retail business lost money for the fifth straight quarter amid slowing sales growth. The world’s largest e-commerce company is cutting 18,000 employees after rapid expansion during the pandemic left it with too many workers.

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