(Reuters) – E-commerce firm eBay forecast first-quarter revenue below Wall Street estimates on Wednesday, as economic uncertainty compelled unaffluent buyers to cut discretionary spending, sending its shares down nearly 9% in extended trading.
High interest rates and persistent inflation have hampered consumer spending for two years, leading to sluggish demand for non-essential items.
“We are continuing to operate in quite a challenging macro environment, particularly in Europe, and now, more recently, we’re facing the uncertainty around U.S. tariffs and de minimis changes,” chief financial officer Steve Priest in a post-earnings call.
Former U.S. President Joe Biden’s administration had said in September that it was moving to curb low-value shipments entering the U.S. duty-free under the $800 “de minimis” threshold, that has been exploited by firms such as Shein and Temu.
Earlier this month, President Donald Trump imposed an additional 10% tariff on Chinese imports, affecting industries from autos to consumer goods, but paused a 25% levy on Canada and Mexico for 30 days.
CEO Jamie Iannone said that eBay’s luxury business and collectibles continue to perform well. “I think it is the less affluent consumer who is pressured in this environment.”
The e-commerce company has been pressurized by decreasing advertising revenue and faces intense competition from Amazon and China’s Alibaba Group, the B2B online marketplace.
The elimination of selling fees for consumer-to-consumer sellers for all items excluding cars sold domestically in the UK is also expected to pressure eBay’s take rate, which is how much money a business makes from a transaction.
The company expects revenue in the range of $2.52 billion to $2.56 billion for the first quarter, compared to analysts’ average estimate of $2.59 billion according to data compiled by LSEG.
EBay expects gross merchandise volume, a key industry metric that denotes the total value of goods and services sold on the marketplace, between $18.3 billion and $18.6 billion for the quarter, below estimates of $18.8 billion.
Revenue for the fourth quarter ended December 31 was $2.58 billion, compared to analysts’ average estimate of $2.57 billion according to data compiled by LSEG.
(Reporting by Juby Babu in Mexico City; Editing by Krishna Chandra Eluri and Varun H K)
