EBay forecasts upbeat quarterly revenue as high-value categories drive momentum
EBay’s Growth Strategy and Financial Performance
By Juby Babu
Aug 5 (Reuters) - EBay forecast third-quarter revenue above Wall Street estimates on Wednesday, leaning on its push into authenticated luxury goods, collectibles and refurbished products to bring more high-value buyers to its online marketplace.
GameStop Bid and EBay’s Strategic Focus
The results are the first since the company rebuffed GameStop's about $56 billion unsolicited bid as "neither credible nor attractive". GameStop CEO Ryan Cohen has, however, said he plans to continue pursuing a combination.
EBay has doubled down on its "focus categories", targeting enthusiast buyers who value selection and specialist services, a strategy that sets it apart from rivals.
Expanding Through Acquisitions
The $1.4 billion acquisition of fashion resale platform Depop is also providing a lift, expanding the company's reach among younger consumers and strengthening its position in the growing re-commerce market.
Performance of Focus Categories
"Focus categories, consumer-to-consumer and re-commerce, each grew 20% on the platform individually and collectively, representing 70% of gross merchandise volume," CEO Jamie Iannone said in an interview with Reuters.
The company forecast third-quarter revenue to be between $3.07 billion and $3.12 billion, compared with analysts' estimate of $2.97 billion.
The online retailer's shares, up more than 25% this year, were trading 1% higher after the bell.
Broad-Based Gains and Financial Highlights
BROAD-BASED GAINS
Second-quarter revenue rose 15% to $3.13 billion, beating analysts' average estimate of $3.02 billion, according to data compiled by LSEG.
Contribution of Key Categories
The results reflect strength that was "broad-based" with focus categories such as collectibles, motors, fashion and refurbished all contributing to growth, Chief Financial Officer Peggy Alford said during a post-earnings call.
Gross Merchandise Volume Growth
Gross merchandise volume, a key industry metric measuring the total value of all goods sold on the platform, rose 15% to $22.4 billion for the three months ended June 30.
The Depop deal, which closed on July 30, has helped eBay unlock "new supply and new demand for the marketplace that had not been there before," Iannone said.
Future Outlook
For the third quarter, eBay expects GMV growth to be between 10% and 12%, including 2.5 points of contribution from Depop, he said.
Including the Depop acquisition, eBay expects annual revenue growth of 11% to 12% on a foreign exchange-neutral basis, up from the 7% to 7.5% range it had projected in April, pending the deal's close.
(Reporting by Juby Babu in Mexico City; Editing by Sriraj Kalluvila and Shilpi Majumdar)