What To Expect From eBay’s Q3 Results

eBay (NASDAQ:EBAY) is scheduled to report its Q3 results on Wednesday, October 19th. We expect eBay’s active buyers to marginally grow to around 165 million and the company’s gross merchandise value to increase in the low single digits to around $20.0-20.5 billion. We also expect eBay’s Q3 top line to grow in low single digits and meet its own guidance of $2.16-2.19 billion. 

We base our estimates on eBay’s consistent positive same-store-sales (SSS) growth for the last five months, owing to growth in eBay Motors (parts and accessories) sales and eBay Fixed-Price sales, which was partially offset by declining marketplace (auctions) sales. ^[1]

Full Year 2016 Expectations

For the full year 2016, eBay expects its revenues to grow 3-4% year over year to $8.85-$8.95 billion, which implies a top line growth rate of 2.5% in the latter half of the year. We expect the company to achieve this target driven by recent initiatives, namely:  1) structuring data into catalogs (for search engine optimization); 2) diversifying traffic sources; 3) enhancing the seller experience; and, 4) trimming down the asset portfolio. However, competition from retailing giants Amazon (NASDAQ:AMZN) and Walmart (NYSE:WMT) in the domestic market could limit eBay’s chances of beating its conservative sales growth target. (Also read: Is eBay Losing Its U.S. E-Commerce Footing To Walmart?)

First Six Months Recap

In the first six months of 2016, eBay’s top line grew 5% year over year to  $4.4 billion, driven by strong growth in StubHub and marketing and advertising revenue. Driven by a 35% decline in general and administrative costs, the company’s operating income grew 20% to over $1.1 billion in the first six months.

Have more questions about Ebay? Please refer to our complete analysis for Ebay

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1. September 2016 ChannelAdvisor Same Store Sales (SSS), Channel Advisor, Oct 7 2016 [↩]