SAN FRANCISCO (Reuters) - EBay Inc on Wednesday joined Wal-Mart Stores in cutting its outlook for the all-important holiday season, suggesting that the fourth quarter may turn out to be weaker than some analysts predicted as recently as last week.
The warnings from two of the retail industry's most influential players comes as investors re-assess the state of the global economy after weak data this week from the two largest countries, the United States and China.
EBay and Wal-Mart blamed divergent factors such as food stamp reductions and unfavorable search-engine optimization for the lower outlooks. Both complained about the stronger US ollar putting the skids on their forecasts, lowering the value of overseas sales once converted into the U.S. currency.
But analysts say stagnant incomes are also prompting U.S. consumers to curtail spending.
EBay's fourth-quarter outlook was undercut by the strength of the dollar against the British pound, the euro and the Australian dollar, which together account for 35 per cent of eBay's volume.
Investors and analysts had expressed high hopes for the holiday season as recently as last week.
The National Retail Federation, in a press release entitled "optimism shines," predicted strengthening consumer confidence would trigger a 4.1 per cent spike in November-December retail sales, outpacing the 3.1 per cent seen in the same period of 2013.
But the group also warned that consumers remained uneasy about economic conditions, echoing concerns from other analysts including those at Moody's.
Two-thirds of Americans are limiting how much they spend each month, according to a Bankrate.com report released this week. The top reason was stagnant incomes.
In a sign of its cautious view on the U.S. market, Wal-Mart said it would slow store openings in the next fiscal year.
Wal-Mart, which recorded US$473.1 billion in sales in its last fiscal year, said it now expects sales to rise 2-3 per cent in the current year to Jan. 31, 2015. It had previously estimated growth at the low end of a 3-5 per cent range.
Lower gasoline prices had been expected to fuel higher retail sales this winter, especially at Wal-Mart and other chains that cater to low- to middle-income shoppers, analysts said.