eBay – solid festive period

eBay Inc has reported a 3.1% rise in revenue for the Q4 holiday period and this suggests improvement at the company’s marketplace business. Shares rose 8% in extended trading on Wednesday this week.

The online marketplace has been revamping its platform to better compete with Amazon as well as directly with brick and mortar retailers. For eBay this has meant a shift away from auctions and toward fixed price sales as well as produc landing pages. This is believed to be easier than wading through the dozens of listings that sellers could generate for a single SKU.

Speaking to Reuters, BGC Partners analyst Colin Gillis said, “It is a turnaround process for the company.”

There have been poor showings for US companies Macys and Kohl’s Group, but in the midst of the gloom, eBay met analysts’ expectations for quarterly profit and revenue, in part because it is a major online site and there is a general move toward online shopping among customers.
“They are clearly confident about the way the business is trending,” said Edward Jones Research analyst Josh Olson. “It’s going to be a question of whether they can execute.”

The guidance suggested that eBay’s marketplace sales growth would accelerate, Baird Equity Research analyst Colin Sebastian said in a note.

However things aren’t entirely rosy for eBay. “The various improvements the company is making are not, as of yet, generating significant traction with consumers,” said Neil Saunders, managing director of retail research firm Conlumino. “They are really about correcting deficiencies rather than putting eBay on an innovative footing.”
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