EBay's luxury focus drives earnings beat as consumer spending slows
Reuters
Published Aug 03, 2022 04:10PM ET
Updated Aug 03, 2022 07:25PM ET
By Yuvraj Malik
(Reuters) -EBay Inc beat second-quarter earnings estimates on Wednesday as the e-commerce company's focus on selling luxury products tempered the hit from a slowdown in consumer spending and weakness in some European markets.
The company forecast a fall in current-quarter revenue but the figure still came in above Wall Street targets. It maintained annual sales estimates at $9.6 billion to $9.9 billion.
Retailers from Walmart (NYSE:WMT) Inc to Target Corp (NYSE:TGT) had warned of a downturn in discretionary purchases as inflation-hit Americans save their dollars for gas, food and other essentials.
But a rise in spending by enthusiasts on high-value collectibles, sneakers and watches helped eBay (NASDAQ:EBAY).
"We are seeing significant outperformance in focus categories globally," said EBay Chief Executive Jamie Iannone in a post-earnings conference call.
A string of consumer companies from spirits group Diageo (LON:DGE) to Birkin bag maker Hermes have also reported cashing in on their most expensive products and expect to continue to do so.
For the current quarter, eBay forecast revenue between $2.29 billion and $2.37 billion, compared with analysts' estimates of $2.30 billion, according to Refinitiv IBES.
However, the company lowered its full-year guidance for gross merchandise value (GMV) to between $72.7 billion and $74.7 billion, from $73.2 billion to $75.2 billion earlier. GMV, a key industry gauge, is the total value of goods sold on the marketplace.
Shares of eBay rose as much as 5% in extended trading before paring most of the gains.
In the reporting quarter, eBay's revenue declined 9% to $2.42 billion, but beat estimates of $2.37 billion.
Excluding items, the company earned 99 cents per share, higher than expectations of 89 cents.
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Written By: Reuters
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