eBay Inc forecasted current-quarter revenue above Wall Street predictions on Wednesday, after exceeding March-quarter earnings estimates, as it benefits from its strategy of focusing on product categories such as trainers and watches.
The electronic commerce firm’s targeted emphasis on items such as collectibles and refurbished products is helping it grow sales at a time when consumer spending has cooled owing to high inflation
“There remains a dynamic and uncertain macroeconomic environment across the globe, with inflation and rising interest rates, as well as pressured consumer confidence… but our focus categories remain relatively resilient,” CEO Jamie Iannone said in an interview.
The positive results helped to calm investor nerves after eBay stated earlier this year that the demand downturn would endure in the first half of 2023. After-hours trading saw a 5% increase in the company’s stock.
EBay is extending its listings in the categories of refurbished electronics, luxury bags and watches, and collectibles. Last year, the company acquired the trading card marketplace TCGplayer.
According to Refinitiv, EBay inc now forecasts June-quarter revenue in the range of $2.47 billion to $2.54 billion, up from analysts’ projections of $2.43 billion.
Revenue increased by 1% to $2.51 billion in the most recent March quarter, exceeding analysts’ expectations of $2.48 billion. Adjusted earnings per share of $1.11 were also higher than the $1.07 expectation.
However, gross merchandise volume, a crucial industry metric that represents the entire amount of goods and services sold on the market, decreased by 5% to $18.4 billion.
“EBay seems to be regaining its original innovative mojo with improved payment, marketing, storage, user interface, and authentication,” said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors.
“However, their potential earnings growth and turnaround capabilities do not appear to have been factored into the stock price.”
EBay shares are up 4.6% this year, compared to a 13.3% increase in the tech-heavy Nasdaq index.
