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EBAY Strengthens Fashion Retail Offering With New Service

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eBay (EBAY - Free Report) introduced a luxury consignment service to expand its footprint in luxury item retail space.

Notably, the new service allows users to connect with expert sellers seamlessly who will list and sell their luxury items like designer handbags.

In regard to the new service, eBay has teamed up with the founder of Linda's Stuff, Linda Lightman.

With the new service, consumers can sell new and pre-owned designer handbags from top brands like Chanel, Hermes, Louis Vuitton, Prada and Saint Laurent, through a seamless consignment process including eBay Authenticity Guarantee checkmarks.

Further, the underlined service is expected to expand its luxury product categories to jewelry and watches by next year.

We note that the latest move will aid eBay in capitalizing on prospects present in the luxury goods market.

Per a Fortune Business Insights report, the global luxury goods market size is expected to hit $284 billion in 2023 and reach $392.4 billion by 2030, witnessing a CAGR of 4.7% between 2023 and 2030.

eBay Inc. Price and Consensus

eBay Inc. Price and Consensus

eBay Inc. price-consensus-chart | eBay Inc. Quote

eBay’s Growing Fashion Efforts

The latest move bodes well for eBay’s growing efforts toward strengthening its offerings, particularly in fashion retail.

Apart from the new consignment service, eBay recently extended its Authenticity Guarantee to streetwear, allowing new and pre-owned items from brands like Aimé Leon Dore, Fear of God and KITH, among others, to be verified by trained authenticators in the United States.

Further, eBay acquired Certilogo, an AI-powered provider of digital IDs and authentication for apparel and fashion goods, offering brands and designers to manage garment lifecycles, provide consumers with reliable product information, and activate circular services.

All these efforts are expected to solidify eBay’s position in the booming online fashion retail market. A report from Statista shows that this particular market is expected to hit $768.7 billion in 2023 and reach $1.1 trillion by 2027 by witnessing a CAGR of 9.5% between 2023 and 2027.

Further, user penetration in the fashion market is expected to reach 34.7% in 2023 and 42.6% by 2027.

We believe growing prospects in this booming market are likely to aid its overall financial performance in the upcoming period. This, in turn, will likely instill investor optimism in the stock.

For third-quarter 2023, eBay expects revenues of $2.46-$2.52 billion. On an FX-neutral basis, the year-over-year growth in revenues is anticipated to be 2-4%. On a spot rate basis, the same is expected between 3% and 6%.

However, geopolitical events, inflationary pressure, foreign exchange rate volatility and lower consumer confidence are major concerns.

eBay’s shares have gained 5.4% on a year-to-date basis, underperforming the industry’s growth of 46.1%.

Zacks Rank & Stocks to Consider

Currently, eBay carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the retail-wholesale sector are Amazon (AMZN - Free Report) , AutoZone (AZO - Free Report) and Arcos Dorados (ARCO - Free Report) . While Amazon sports a Zacks Rank #1 (Strong Buy), AutoZone and Arcos Dorados carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Amazon shares have gained 72.4% in the year-to-date period. AMZN’s long-term earnings growth rate is currently projected at 33.83%.

AutoZone shares have gained 2.6% in the year-to-date period. The long-term earnings growth rate for AZO is currently projected at 12.48%

Arcos Dorados shares have gained 22.1% in the year-to-date period. ARCO’s long-term earnings growth rate is currently projected at 11.38%.

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