EBay (EBAY.O) and other e-commerce companies warned on Tuesday of lower-than-expected customer spending, forecasting fourth-quarter sales and profit below Wall Street estimates.
Located in San Jose, California, Following the bell, shares of eBay were down around 6.8% in trade. High-interest rates and persistent inflation in both the U.S. and central European nations have further reduced the discretionary spending of consumers. The increasing competition from websites like Amazon, which sells a wide variety of everyday items, has made eBay’s issues worse.
In a post-earnings call, CEO Jamie Iannone stated, “We’ve observed softening consumer trends to date in Q4 and particular challenges in Europe, suggesting we may see a more muted seasonal uptick over the holidays.”
eBay has intense competition in attracting traffic, even if U.S. online sales are predicted to increase by 4.8% over the critical Christmas season, which runs from November 1 to December 31.
Data from July to October of this year shows a deteriorating trend in online traffic on eBay, according to analysts at Jefferies earlier this month.
“EBay’s results are consistent with other companies we have seen in e-commerce, including Amazon and Etsy, which reflect a very challenging environment for discretionary spending.” Tom Forte, an analyst with D.A. Davidson &
Based on LSEG data, eBay predicted revenue for the current quarter between $2.47 billion and $2.53 billion, less than predictions of $2.60 billion. In addition, the business projects current-quarter adjusted profit per share between $1 and $1.05, up from projections of $1.04.
Per predictions from Wall Street, the company’s third-quarter sales increased by 5% to $2.50 billion as the market for reconditioned items increased. Against forecasts of $1, eBay earned $1.03 per share on an adjusted basis.
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