EBay sales rise fails to impress investors

eBay Inc failed to sustain investor enthusiasm that its turnaround efforts were working, reporting sales growth that continued to lag behind the ecommerce industry and did not narrow the gap with giant Amazon.com.

CEO Devin Wenig’s decisions to increase spending on marketing, redesign eBay’s homepage to personalise products for each visitor and make it easier for users to navigate the site’s 1-billion listings produced a sales gain of 3.7% in the first quarter, similar growth to the prior period. His goal, almost two years after the company split with PayPal Holdings, is to make eBay a go-to for unique items not found on Amazon.

“They continue to struggle to show consistent results,” said Josh Olson, an analyst at Edward Jones & Co. “Last quarter was promising and we’re back to uninspiring results this quarter. We’re back to inconsistency.”

Revenue in this quarter will be $2.28bn-$2.32bn, eBay said on Wednesday. Analysts on average estimated $2.32bn, according to data compiled by Bloomberg. Adjusted earnings per share will be 43c-45c, compared with analysts’ projections of 47c.

First-quarter profit was 49c per share on revenue of $2.22bn. Analysts estimated 48c on sales of $2.21bn, according to data compiled by Bloomberg.

“While eBay is certainly providing initial signs of a turnaround, we need to see results start to come better than simply par performance,” said James Cakmak, an analyst at Monness Crespi Hardt & Co.

“At the end of the day, they are still losing share versus the broader e-commerce market.”

ACTIVE BUYERS

The company gained 2-million active buyers in the first quarter to 169-million, a 4% gain from the period a year earlier. Gross merchandise volume, which is the value of goods moved through transactions, gained 2.4% to $20.9bn, about the same growth as the previous quarter.

eBay’s shares fell as much as 4.5% after closing at $33.85 in New York. The stock has gained 14% in 2017.

The company is looking to speed up sales growth, which has lagged behind that of e-commerce leader Amazon and faces increasing pressure as Walmart Stores invests in online sales.

AT THE END OF THE DAY, THEY ARE STILL LOSING SHARE VERSUS THE BROADER E-COMMERCE MARKET