eBay Gives Disappointing Outlook, Highlighting Threat of Amazon

eBay gave a weak outlook for revenue growth in the current quarter, taking the shine off CEO Devin Wenig’s turn-around strategy, according to Bloomberg.

The online marketplace said it expects revenue of $2.64 billion to $2.68 billion in the second quarter, while analysts were projecting $2.68 billion. The outlook stirred concerns about the company’s ability to return to consistent growth and sent the shares tumbling.

Investors are carefully watching eBay’s sales to determine if it can remain relevant in an e-commerce market dominated by Amazon. Adding to the pressure are brick-and-mortar retailers like Walmart that are enhancing their own digital shopping options.

eBay wants to use artificial intelligence and augmented reality to personalize the shopping experience and make browsing the site more fun, which it sees as key to inspire purchases and discovery rather than just appeal to "mission shoppers" who know what they want before they arrive. The company is adding more home goods and apparel to attract younger shoppers and women, since the site’s shoppers skew to older men.

In the first quarter, eBay posted profit of 53 cents a share, on revenue of $2.58 billion, largely in line with analysts’ forecasts. Total gross merchandise volume, a key metric, rose 13 percent to $23.6 billion. The shares fell as much as 7 percent in New York. eBay is up about 25 percent in the past 12 months, nearly triple the gains of the Standard & Poor’s 500 Index.