EBay compounds e-commerce gloom with disappointing forecast

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

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  • Q2, annual revenue forecasts are lower than market estimates
  • The war in Ukraine hits traffic, the impact will continue until 2022
  • Stocks drop 6% in extended trading

May 4 (Reuters) – EBay Inc (EBAY.O) on Wednesday became the latest e-commerce retailer to give a grim revenue forecast as growth slows in the sector after two years of rapid expansion during the pandemic, dragging down its shares 6% in extended trade.

According to Refinitiv IBES data, the company was forecasting revenue of between $2.35 billion and $2.40 billion in the second quarter, compared to an average of $2.54 billion for analysts. Its forecast for the full year was also below market estimates.

This austere view reflects the expected hit from a return to pre-pandemic shopping habits and stubbornly high inflation, which should reduce consumer spending. It also reflects weakness seen at arch-rival Amazon.com Inc (AMZN.O) and arts and crafts marketplace Etsy Inc (ETSY.O). Read more

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In the first three months of the year, eBay’s gross merchandise volume – a widely tracked figure for e-commerce industry performance – fell 20% to $19.4 billion.

Chief Financial Officer Stephen Priest said on a post-earnings call that the company has also been affected by the conflict in Ukraine, which has weighed on e-commerce traffic in its key markets of Germany and the United Kingdom.

“These negative impacts will continue through 2022,” he said.

Active buyers on eBay fell 13% to 142 million in the quarter. Revenue fell 6% to $2.48 billion, but was slightly above expectations of $2.46 billion.

While the company’s first-quarter adjusted earnings were better than estimates, its current period earnings forecast of 87 cents per share to 91 cents per share was below analysts’ average opinion of $1.01 per share. stock.

The e-commerce sector has been grappling with rising costs in recent months due to a tight labor market and the ongoing supply chain crisis.

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Reporting by Tiyashi Datta in Bengaluru; Editing by Aditya Soni

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