CALIFORNIA (Reuters): Ebay (EBAY.O) forecast fourth-quarter revenue and profit below Wall Street estimates on Tuesday and joined other e-commerce platforms in sounding the alarm on weaker-than-expected consumer spending.
San Jose, California-based eBay’s shares were down about 6.8% in trading after the bell.
High interest rates and stubborn inflation across major economies in Europe as well as in the United States have further eaten into consumers’ discretionary budgets.
Rising competition from the likes of Amazon, that sells a lot of consumer staples, has amplified eBay’s woes.
“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,” CEO Jamie Iannone said on a post-earnings call.
While U.S. online sales are expected to rise 4.8% in the crucial holiday season between Nov. 1 and Dec. 31, eBay faces stiff competition to attract traffic.
Analysts at Jefferies said earlier this month that web traffic on eBay continues to decline, with data showing a worsening trend through July to October this year.
“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,” D.A. Davidson & Co analyst Tom Forte said.
EBay forecast current-quarter revenue in the range of $2.47 billion to $2.53 billion, compared with estimates of $2.60 billion, according to LSEG data.
The company also expects current-quarter adjusted profit per share in the range of $1 to $1.05, compared with estimates of $1.04.
Third-quarter revenue rose 5% to $2.50 billion, in line with Wall Street expectations, as the company saw an uptick in demand for refurbished goods.
On an adjusted basis, eBay earned $1.03 per share, compared with estimates of $1.
