EBay reported gross merchandise volume, the value of all goods sold on its platforms, of $21.7 billion, down 4.4% from a year earlier and its third straight decline. The online marketplace gave a revenue forecast that fell short of analysts’ estimates, suggesting a management shakeup threatens its performance during the busy holiday shopping season.
The gross value of goods sold on eBay Inc.’s U.S. marketplace declined 5.8% year over year to $8.49 billion from $9.01 billion in the third quarter ended Sept. 30, the online marketplace reported Wednesday.
Year to date, U.S. gross sales declined 5.6% to $26.21 billion from $27.76 billion during the same period in 2018. Executives pointed to new online sales tax laws as one reason for the sales decline in the U.S.
“Buyers are seeing higher prices at checkout [due to added sales tax] and are purchasing less particularly large dollar items,” Scott Schenkel, chief financial officer and interim CEO, said on a call with investors, according to a SeekingAlpha transcript. “In Q3, the impact of U.S. GMV was more than three points, and we expect that headwind to grow in Q4 as new laws in California, Texas, and nine other states take effect. While this impact is not unique to sellers on our platform, it is disproportionately affecting small businesses, many of whom sell on eBay.”
Schenkel has been serving as interim CEO since last month’s departure of former CEO Devin Wenig, who clashed with activist investors.
EBay reported global total gross merchandise volume of $21.71 billion in the third quarter, down 4.4% from a $22.72 billion a year earlier and its third straight decline. For the first nine months of the year, eBay sold $66.91 billion on all its marketplaces globally, compared with $69.94 billion during the same period in 2018.
Looking forward, the company said fourth-quarter sales would be $2.77 billion to $2.82 billion, compared with estimates of $2.85 billion. The results announced Wednesday show Wenig’s departure could cloud the fourth quarter.
Wenig’s departure followed months of agitating by activist investors Elliott Management Corp. and Starboard Value, who have pushed for the sale of units including the ticket-resale site StubHub and the classified ads business. EBay said it continues to review the “role and value” of those units and would provide an update on StubHub before its next earnings release.
“The core marketplace business continues to struggle,” said Ygal Arounian, an analyst at Wedbush Securities Inc. “After all the noise about asset sales, the marketplace is what needs to ultimately improve and we’re not really close.”
EBay is No. 5 in the ranking of Internet Retailer Online Marketplaces.