Ebay sales falter as analysts call Amazon the “primary culprit”
Ebay has seen its shares dive five per cent after it warned investors that it would miss analyst estimates this quarter, with experts citing Amazon as the “primary culprit”.
The online marketplace said that earnings for its first quarter will come in at 50 to 53 cents per share on sales of $2.55 billion to $2.6 billion (£2 billion), missing estimates of 71 cents per share and revenues of $2.64 billion (£2.03 billion).
This also demonstrated yet further stagnant growth after reporting sales of $2.8 billion (£2.15 billion) in its previous quarter and profits of 81 cents per share, despite the company forcing through significant changes last year in an effort to rejuvenate its sales.
Activist investors Elliott Management and Starboard Value, which purchased a stake in Ebay and introduced members to its board in early 2019, have been piling pressure on the company to make changes in the face of growing competition from the likes of Amazon and Walmart.
READ MORE: Ebay sells StubHub to Viagogo for $4bn
In March Ebay conceded and launched an in-depth strategic review of its business, a move which caused rifts in its boardroom.
This culminated in the shock departure of its chief executive David Wenig in September, who said it was clear he was “not on the same page as my new board”.
In November, Ebay also succumb to investor pressure to offload its ticket sales website StubHub to Viagogo for $4.05 billion (£3.15 billion).
Stiff competition from online marketplace rivals have also forced Ebay to shift its focus towards its advertising and payments business, seeing nearly $116 million (£88.3 million) slashed from its marketing expenses in the fourth quarter.
“(Ebay) also pulled back on marketing, basically giving up more share back to the marketplace in certain unprofitable channels,” Benchmark analyst Daniel Kurnos told Reuters.
“I’d say Amazon is still the primary culprit”.