EBay’s luxury focus drives earnings beat as consumer spending slows
7:23 pm Wednesday, August 03rd, 2022
By Yuvraj Malik
(Reuters) -EBay Inc beat second-quarter earnings estimates on Wednesday as the e-commerce company’s focus on selling luxury products tempered the hit from a slowdown in consumer spending and weakness in some European markets.
The company forecast a fall in current-quarter revenue but the figure still came in above Wall Street targets. It maintained annual sales estimates at $9.6 billion to $9.9 billion.
Retailers from Walmart Inc to Target Corp had warned of a downturn in discretionary purchases as inflation-hit Americans save their dollars for gas, food and other essentials.
But a rise in spending by enthusiasts on high-value collectibles, sneakers and watches helped eBay.
“We are seeing significant outperformance in focus categories globally,” said EBay Chief Executive Jamie Iannone in a post-earnings conference call.
A string of consumer companies from spirits group Diageo to Birkin bag maker Hermes have also reported cashing in on their most expensive products and expect to continue to do so.
For the current quarter, eBay forecast revenue between $2.29 billion and $2.37 billion, compared with analysts’ estimates of $2.30 billion, according to Refinitiv IBES.
However, the company lowered its full-year guidance for gross merchandise value (GMV) to between $72.7 billion and $74.7 billion, from $73.2 billion to $75.2 billion earlier. GMV, a key industry gauge, is the total value of goods sold on the marketplace.
Shares of eBay rose as much as 5% in extended trading before paring most of the gains.
In the reporting quarter, eBay’s revenue declined 9% to $2.42 billion, but beat estimates of $2.37 billion.
Excluding items, the company earned 99 cents per share, higher than expectations of 89 cents.
(Reporting by Yuvraj Malik in Bengaluru; Editing by Devika Syamnath)
