Ebay has lowered its third-quarter profit forecast, sending its shares down 4.5% after the bell. The e-commerce platform said it expects profit to be between 96 cents and $1.01 per share, compared to analysts’ estimates of $1.02.
The company said the lower forecast was due to higher investments in areas such as auto parts, refurbished goods, and collectibles. Ebay also said it is spending more to attract Gen Z buyers, through initiatives such as its streetwear vertical.
eBay’s shares dropped 6% in premarket on Thursday after the company reported its earnings. The adjusted EPS was $1.03 with revenue of $2.54B, slightly exceeding analysts’ expectations of $0.99 EPS and $2.51B revenue. The gross merchandise volume was $18.2B, down 2% as reported.
Looking ahead to Q3, eBay forecasts an adjusted EPS between $0.96 and $1.01 with revenue ranging from $2.46B to $2.52B. This is slightly lower than Wall Street’s estimates, which were expecting an adjusted EPS of $1.02 on revenue of $2.47B.
Ebay said it expects third-quarter revenue to be in the range of $2.46 billion to $2.52 billion, in line with analysts’ estimates. The company’s shares have fallen about 20% this year, as investors have become concerned about its growth prospects. Ebay faces competition from larger online retailers such as Amazon and Shopify.
The sources for this piece include an article in Reuters.