(Bloomberg) -- EBay Inc. warned investors that its sales boost tied to the pandemic and government stimulus checks may be coming to an end.
Shares tumbled as much as 7% in extended trading Wednesday after the online marketplace issued a revenue forecast for the current quarter suggesting spending on the site could recede as more people get vaccinated, businesses reopen and stimulus checks dry up.
Investors are watching to see which companies can build on their pandemic gains and which will fade. Google parent Alphabet Inc., Facebook Inc. and Shopify Inc. all hinted at lasting momentum in their earnings reports this week, sending their shares higher. EBay joined social media platform Pinterest Inc. as a potentially short-lived pandemic phenom.
“This is a relative challenge for EBay to not be able to fully hang on to the gains from the pandemic,” said Ygal Arounian, an analyst at Wedbush Securities Inc.
Sales will be $2.98 billion to $3.03 billion in the second quarter, the San Jose, California-based company said in a statement. Earnings, excluding some items, will be 91 cents to 96 cents a share. Analysts estimated profit of 98 cents a share on sales of $2.95 billion.
Pandemic-wary consumers have turned to online marketplaces like Amazon.com Inc. and EBay, which said it ended the quarter with 187 million active buyers, an increase of 7% from a year earlier. The big question for investors is whether the change in shopping habits will endure post-outbreak and if shoppers will start shifting some of their disposable income to traveling and eating out once most people are vaccinated. Amazon is scheduled to report results on Thursday.
EBay Chief Executive Officer Jamie Iannone, who took the reins last year, is looking to generate more revenue from advertising and payments, businesses that can offset slow growth of the company’s core online marketplace. He is trying to boost sales of luxury watches and sneakers, hoping enthusiasts for those products explore other corners of the site and spend money in other areas like home goods and apparel.
Gross merchandise volume, the value of all goods sold on the site, rose 29% in the first quarter to $27.5 billion. Analysts predicted $26.2 billion.
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