Ebay and Etsy issued weaker outlooks for the months ahead, triggering sell-offs in the shares of the two online marketplaces.
Both companies on Wednesday said they were experiencing “headwinds”, with Etsy singling out issues related to consumer discretionary spending, coronavirus-related reopenings and geopolitical events.
Ebay said it expected revenue in its second quarter to be down 7-9 per cent from a year ago to $2.35-$2.4bn and for adjusted earnings of 87 to 91 cents a share. That was below forecasts for revenue of more than $2.5bn and earnings of $1.01 a share pencilled in by analysts in a Refinitiv survey.
The company also cut its full-year guidance to levels below market expectations, and forecast revenue of $9.6-$9.9bn and adjusted earnings of $3.90-$4.10 a share.
Etsy was in a similar situation. It forecast revenue of $540mn to $590mn in its second quarter, which is below Wall Street’s forecast for about $628mn.
In after-hours trade, Ebay shares were down 6.3 per cent and Etsy dropped 9.5 per cent.
For Ebay and Etsy, the weaker outlooks outweighed revenue performances in the first quarter that came in slightly ahead of Wall Street forecasts. But they also reinforce concerns that the boost the companies enjoyed during the pandemic, as homebound consumers increased their online shopping, has faded.
EBay’s net revenues of $2.48bn in the first three months of the year were down slightly less than the market expected, while adjusted earnings of $1.05 a share was 2 cents better than forecast. Etsy’s revenue of $579.2mn scraped in almost $4mn ahead of forecasts, but net income of $86.1mn was about $3.6mn lower than Wall Street expected.
