EBay forecasts bleak quarter as online shopping frenzy wanes

-EBay Inc on Wednesday forecast bleak first-quarter outcomes, because the e-commerce platform tackles waning on-line demand, stiff competitors and world provide chain disruptions, sending the corporate’s shares down practically 9% in prolonged buying and selling.

E-commerce firms raked in massive income as on-line buying boomed final 12 months through the pandemic, however vaccine rollouts might spell hassle as folks return to brick-and-mortar buying.

Largest rival and on-line retail big Amazon.com Inc has additionally forecast disappointing first-quarter gross sales estimates.

EBay, which is already grappling with declining energetic customers, expects an extra hit as ramping up investments put stress on its margins.

“The second quarter ought to mark the low level for margins through the 12 months as we lap tough comps and ramp up our tempo of funding,” finance chief Stephen Priest mentioned in a post-earnings convention name.

Shares of eBay, which began as a website the place folks would public sale their collectibles, fell to $50.28 in prolonged buying and selling on Wednesday. They declined 18% thus far this 12 months, whereas the broader S&P Index slipped 11%.

EBay expects first-quarter adjusted revenue within the vary of $1.01 to $1.05 on income of $2.43 billion to $2.48 billion; each estimates got here in beneath Wall Road’s expectations.

The corporate’s 2022 income and revenue forecasts had been additionally beneath expectations.

In the meantime, eBay posted an adjusted revenue of $1.05 per share on income of $2.61 billion within the fourth quarter ended Dec. 31, above analysts’ common estimates, in response to IBES knowledge from Refinitiv.

A part of eBay’s income comes from promoting on its platform which crossed $1 billion final 12 months, the corporate mentioned.

Nonetheless, gross merchandise quantity, the whole greenback worth of gross sales on eBay from which the corporate takes a share, fell 10% to $20.7 billion.

Annual energetic patrons on eBay additionally declined 9% to 147 million within the quarter, the corporate mentioned.