eBay Inc., a well-known online marketplace, has recently projected lower than expected revenue for the upcoming holiday season, indicating its ongoing struggle to compete with larger rivals like Amazon.com Inc. and Walmart Inc. The company predicts earnings per share of $1 to $1.05 on revenue ranging between $2.47 billion to $2.53 billion for the quarter ending in December. On average, analysts had estimated a profit of $1.05 per share on sales of $2.6 billion.

Unfortunately, eBay’s stock took a hit following the announcement, falling approximately 6% in after-market trading. Year-to-date, the company’s shares have declined nearly 2%, while the S&P 500 has experienced a 14% gain.

Despite the overall growth in online spending in the US, eBay is struggling to maintain its market share. CEO Jamie Iannone has been implementing strategies to attract cost-conscious shoppers, such as focusing on selling luxury items like watches and refurbished goods. The company has also invested in technology to improve its online features and reduced its workforce by 4% earlier this year.

In an effort to regain market share, eBay made a bold move by opening a collectible sneaker store on Manhattan’s Canal Street. The store aims to authenticate popular brands, targeting streetwear enthusiasts who are concerned about purchasing counterfeit items online.

For the third quarter, eBay reported a profit of $1.03 per share on sales of $2.5 billion, meeting analysts’ expectations. The gross merchandise volume, which represents the total value of goods sold on eBay, increased by 2% to $18 billion, surpassing the average estimate of $17.8 billion. However, the company experienced a 3% decline in active buyers, with 132 million recorded in the quarter.

Despite narrowly missing analysts’ estimates with advertising revenue of $366 million, eBay has been focused on expanding its advertising and payments products for merchants to counter the slow growth in consumer spending on the platform.

Overall, eBay Inc. is facing fierce competition from rivals such as Amazon and Walmart. The company’s efforts to attract cost-conscious shoppers and invest in technology are steps in the right direction, but it remains to be seen if eBay can regain its lost market share.

Useful links:
1. Amazon.com Inc.
2. Walmart Inc.