EBay Releases Third Quarter Earnings and Disappointing Q4 2024 Forecast

Online marketplace eBay reported revenue of $2.58 billion in the third quarter. Rising 2%, gross merchandise volume, a measure of total goods and services sold on the platform, reached $18.3 billion.

For the current fourth quarter, eBay expects revenue to land between $2.53 billion and $2.59 billion, according to Reuters. The prediction falls below analysts’ expectations of $2.65 billion. Earnings per share should be in the $1.17 to $1.22 range, which meets estimates of $1.22.

EBay CEO Jamie Iannone blamed hurricanes, the upcoming presidential election, and fewer shopping days this holiday season for the lower fourth-quarter outlook. Yet, consumers still go to eBay for “great values” on used and refurbished items, which is beneficial during tough economic times, noted Iannone.

“When you look at the trajectory and the momentum that we’re on, we’re exactly where we expected to be,” said Iannone, per CNBC. “We feel really good.”

The forecast for the 2024 holiday shopping season could unexpectedly boost eBay’s sales in the fourth quarter. The National Retail Federation is predicting spending will increase this year. The average consumer will likely spend about $902, up $25 from last year.

EBay’s Strategies To Stay Competitive

Competitors Walmart and Amazon as well as online discounters Temu and Shein have been gradually eating away at eBay’s market share. To slow the erosion, the company has been working new angles to attract and retain customers.

EBay has implemented authentication services to protect shoppers from inaccurate item descriptions as well as fake products, notably shoes and watches. The platform also provides guarantees on vehicle parts and a warranty program on refurbished items.

Just like other retailers, eBay is investing in artificial intelligence. With the AI-powered “shop the look” section, clothes buyers using the eBay mobile app will get image and idea suggestions based on shopping habits and history.

EBay’s “focus categories” help shoppers who are looking for specific things like luxury goods, collectibles, and used appliances. The categories have also attracted buyers wanting to spend more on specific products like nostalgia items, trading cards, and rare guitars.

“Our focus categories and geo-specific investments are driving momentum in the business, and we are leveraging the power of Al to create magical innovations for our customers,” Iannone said in the recent earnings report.