EBay’s Covid-19 Crackdown
EBay Inc. raised its forecast for revenue and earnings in the current quarter as people flock to the online marketplace amid the COVID-19 pandemic that has left most physical stores shuttered for more than two months.
EBay said it now expects sales of as much as US$2.8 billion in the second quarter, up from a previous forecast for as much as US$2.48 billion. In a filing the company said it sees adjusted earnings per share of as much as US$1.06, up from 80 cents previously.
More people are being drawn to EBay’s marketplace across a wide variety of categories, from home and garden to electronics, fashion and auto parts, EBay said. The site has seen about six million new and reactivated buyers added in April and May. Tens of thousands of small-business sellers have also flocked to the platform since March. Shares in the San Jose, California-based company jumped as much as 12 per cent, hitting an intraday high of US$51.88. The stock has gained 38 per cent this year.
EBay earlier this year named former Walmart Inc. executive Jamie Iannoneas chief executive officer. Activist investors Elliott Management Corp. and Starboard Value have been pushing EBay to increase profitability by selling pieces of itself following years of stagnation in its core marketplace business.
The company in February completed the sale of its event-tickets marketplace StubHub to Viagogo for US$4.05 billion and is exploring options for the classifieds business. EBay is also trying to boost revenue from its advertising and payments businesses. In the statement, EBay said revenue from its classifieds business is at the high end of its previously disclosed expectations, with automotive subscription revenue recovering as dealerships reopen across international markets.
To further engage new buyers, EBay is making additional investments in marketing and technology to keep people coming back and buying on the site more often.
EBay didn’t update its full-year guidance at this time, but said it will likely be above previously announced ranges. In April, the company said it expects 2020 revenue of as much as US$9.76 billion and adjusted earnings per share of as much as US$3.10
Taking a step to address the wave of protests over racial injustice sweeping the U.S. in the past week, EBay said it is making a donation of more than US$1.3 million, split between the NAACP Legal Defense Fund and the Equal Justice Initiative.