eBay’s performance so far in 2023 sees shares fall

E-Bay headquarters, San Jose/Shutterstock Images

23 February 2023, California: Global e-commerce business eBay warned on Wednesday that demand had fallen over the holiday quarter due to reduced consumer spending in Europe and the United States – with shares falling almost 6 per cent as a reaction to this contraction in earnings.

“While we do see potential for an improvement in underlying economic conditions as the year progresses, it is too early to predict the second half recovery,” eBay’s Chief Financial Officer Steve Priest told analysts, as reported by Reuters.

Insider Intelligence analyst Andrew Lipsman said that “eBay’s guidance reflected slightly more Q1 optimism than Amazon, but it may not be enough to generate enthusiasm for a business that continues to face headwinds and underperform its e-commerce peers,”

After seeing a boost in sales during the 2020–2022 pandemic, e-commerce companies are now facing various challenges to their profits, including surging expenses due to the energy crisis, decreasing consumer confidence due to the cost of living situation as well as intense competition from rivals to attract and keep consumers.

San Jose, California-based eBay forecast current-quarter revenue between $2.46 billion and $2.50 billion, compared with Wall Street’s estimates of $2.37 billion, according to Refinitiv data.

Revenue for the quarter ended Dec. 31 fell 4 per cent to $2.51 billion. Analysts are expecting $2.47 billion.

The company refrained from providing full-year outlook.

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