After eBay lowered its revenue guidance for the year and provided a lower-than-expected sales forecast for the third quarter, shares of the marketplace fell more than 5 percent in after-hours trading. While analysts had forecasted sales of $2.7 billion and earnings per share (EPS) of 56 cents, eBay projected sales of only $2.64 billion to $2.69 billion and EPS of 54 cents to 56 cents.
In terms of second-quarter earnings, the retailer reported earnings per share of 53 cents and revenues of $2.6 billion, compared to analysts’ estimates of 51 cents and $2.7 billion respectively. The earnings also come as StubHub saw its slowest growth since Q2 of 2017 – 4 percent on an as-reported basis.
In the company’s post-earnings conference call, according to Reuters, eBay Chief Executive Officer Devin Wenig cited a bad start to the Major League Baseball (MLB) season – along with a five-game World Series and a four-game NBA series – as reasons for the slow growth: “There were just a lot of things that broke the wrong way on the landscape,” Wenig said.
Still, as eBay rolls out new ways to buy and sell items on its platform, the site grew active buyers by 4 percent and reached a total of 175 million active buyers around the world in the second quarter. And eBay’s marketplace brought in $2.1 billion in revenue, with marketplace revenue growth of 9 percent on an as-reported basis and 6 percent on an FX-Neutral basis.
The earnings come as the company has “pursued significant opportunities in advertising and payments,” Wenig said in a press release announcing the earnings. In terms of improvements to its platform, the eCommerce marketplace has rolled out a feature that curates its wide selection of inventory to match the passions and styles of individual shoppers. The feature — dubbed “Interests” — uses data and algorithms to match users with hundreds of shopping themes, from streetwear to sports teams. With this information, Interests is able to match users with themes based on their responses to a few questions and an analysis of their browsing patterns.
In addition, eBay has rolled out a number of initiatives in Australia: The marketplace launched a membership program dubbed eBay Plus, for example, that provides Australian customers with free delivery and returns. And eBay said it plans to sell its holdings in Flipkart for reported proceeds of approximately $1.1 billion. The company said that it will end its current strategic relationship with Flipkart after the transaction’s close.