EBay forecasts revenue below estimates on weak demand, shares fall

(Reuters) -Ecommerce firm eBay forecast fourth-quarter revenue below Wall Street estimates on Wednesday as cautious consumers shun collector's items and refurbished goods, sending its shares down more than 7% in extended trading.

The broader economy is still fluctuating and customers are cautious about discretionary spending.

Several discretionary marketplaces have been struggling to sustain growth, analysts at Bernstein have said, highlighting the challenging macro backdrop eBay is operating against.

EBay has been under pressure as inflation-hit shoppers become increasingly choosy about their online purchases.

"Our outlook also contemplates a challenging operating environment due to persistent economic headwinds and several one-off dynamics in Q4 - specifically, greater consumer attention on U.S. election, the shorter holiday shopping period this year and Hurricane Milton in early October," said CFO Steve Priest in a post-earnings conference call.

U.S. holiday sales are expected to grow as much as 3.5% from November to December, the slowest pace in six years, the National Retail Federation forecast in October, as shoppers turn more frugal and get picky with spending on non-essentials.

EBay expects revenue in the range of $2.53 billion to $2.59 billion for the fourth quarter ending Dec. 31. Analysts on average were expecting $2.65 billion, according to data compiled by LSEG.

The company forecast fiscal year 2024 revenue to be between $10.23 billion and $10.29 billion, below estimates of $10.32 billion.

For the third quarter ended Sept. 30, eBay posted revenue of $2.58 billion, above analysts' estimate of $2.55 billion.

Gross merchandise volume, a key industry gauge that denotes the total value of goods and services sold on the marketplace, rose 2% to $18.3 billion in the quarter.

(Reporting by Juby Babu in Mexico City; Editing by Maju Samuel)