eBay CEO on “Cautious” Holiday Outlook: We Didn’t Mean to Sound So Negative
EBay’s stock price is down more than five percent since the close of market on Wednesday — the day that eBay reported its third-quarter earnings.
But the reason for that decline isn’t the quarter eBay had — which was mixed, but generally in line with Wall Street analyst expectations — it’s what it said about the coming quarter and the always-important holiday shopping season.
The company cut its guidance range for the fourth quarter, and CFO Bob Swan told analysts on the earnings call that the U.S. e-commerce market had “softened considerably, and we have a cautious outlook for the holiday season.”
Citing comScore data, he went on to reference “dramatically decelerating U.S. e-commerce growth,” and said there were no signs in the first half of October that there would be much of a change in the rest of the fourth quarter.
But later that evening, eBay CEO John Donahoe said that the company’s outlook had perhaps been too negative, when told that analysts on the call seemed spooked by it. He also partly blamed illness for the tone in which the news was delivered on the call.
“The truth is Bob and I both have colds,” Donahoe said in an interview with AllThingsD on Wednesday evening. “I think it came across more negative than intended.”
That said, he laid out the rationale for the cautious outlook: That decelerating e-commerce growth, according to comScore; the government shutdown; and a holiday season that has fewer days than in years past, due to how late in November Thanksgiving is this year.
“I don’t think we are seeing anything different than others are seeing; we just report first,” Donahoe said.
The hope, he said, is that the end of the government shutdown will have a positive effect on the consumer psyche, but, in the end, “no one really knows what to expect for the holiday season.”
“We try to under-promise and over-deliver,” he added. “We try to be very consistent in having a conservative outlook … but we didn’t intend to be that negative.”