EBay’s higher investments weigh on profit forecast, shares fall
5:07 pm Wednesday, July 26th, 2023
(Reuters) -EBay forecast third-quarter profit below market expectations on Thursday as the e-commerce platform spent more to bolster categories such as auto parts, refurbished goods and collectibles, sending its shares down 4.5% 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 D.A. Davidson & Co analyst Tom Forte.
The company forecast third-quarter profit to be between 96 cents and $1.01 per share, compared to analysts’ estimates of $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%, to $18.2 billion in the second quarter.
The company forecast third-quarter revenue in the range of $2.46 billion and $2.52 billion, compared to analysts’ average estimates of $2.47 billion.
Revenue in the quarter ended June 30 was $2.54 billion, compared to expectations of $2.51 billion.
(Reporting by Chavi Mehta in Bengaluru; Editing by Pooja Desai and Arun Koyyur)
