Shares of eBay Inc. (NASDAQ: EBAY) were down 1% on Friday. The stock has gained 16% year-to-date. The company is scheduled to report its fourth quarter 2022 earnings results on Wednesday, February 22. Here’s a look at what to expect from the earnings report:
Revenue
eBay has guided for revenue of $2.42-2.50 billion for the fourth quarter of 2022. Analysts are projecting revenue of $2.46 billion for the company. This compares to $2.6 billion reported in the fourth quarter of 2021. In the third quarter of 2022, eBay’s revenue declined 5% year-over-year to $2.4 billion.
Earnings
eBay expects its GAAP EPS to come between $0.76-0.82 and its adjusted EPS to come between $1.03-1.09. Analysts are projecting EPS of $1.06. In Q4 2021, the company reported adjusted EPS of $1.05. In Q3 2022, adjusted EPS rose 11% YoY to $1.00.
Points to note
eBay has been operating in a challenging environment where inflation has continued to pressure consumer spending leading to a slowdown in demand for discretionary goods. In Q3 2022, the company’s gross merchandise volume (GMV) fell 11% YoY to $17.7 billion.
However, these headwinds have sparked a demand for pre-owned goods. Pre-owned, refurbished and vintage goods provide value for buyers and extra income to sellers which make them an attractive option in an inflationary environment.
eBay’s focus on non-new in-season goods have allowed it to stay resilient in this difficult environment. Pre-owned and refurbished goods alone make up over a third of its GMV and they have been growing significantly faster than brand new goods in recent years. This trend is likely to have continued through the fourth quarter amid the challenging macro environment.
eBay does not expect macro headwinds to let up just yet and it has predicted that the challenges are likely to continue this year as well. The energy crisis in Europe along with strikes and workforce disruptions in the UK could also have impacted its business in the fourth quarter. eBay has guided for $17.5-18.1 billion in GMV for Q4.
Click here to read the full transcript of eBay’s Q3 2022 earnings conference call