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EBay's luxury focus drives earnings beat as consumer spending slows

Stock Markets Aug 03, 2022 07:25PM ET
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© Reuters. FILE PHOTO: The eBay app is seen on a smartphone in this illustration taken, July 13, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

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.

EBay's luxury focus drives earnings beat as consumer spending slows
 

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