EBay Inc. said revenues at its GSI segment increased 12 percent year over year in the third quarter, to $226 million, driven primarily by a 16 percent year over year increase in global e-commerce (GeC) merchandise sales. Same store sales grew 19 percent year over year, reflecting strong e-commerce sales from retail clients.
In June 2011, eBay finalized its $2.4 billion acquisition of GSI Commerce, which provides fulfillment and marketing services for e-commerce sites of several big-box sporting goods chains and pro sports leagues.
“GSI had another strong quarter, driving a 19 percent increase in same-store sales for its clients, once again outpacing e-commerce,” said John Donahoe, eBay's CEO and president. “This business continues to execute well, and we continue to make good progress in capturing synergies across our portfolio to help large retailers.”
Robert Swan, eBay's CFO and SVP, finance, said GSI's 12 percent overall gain was fueled by strong volume growth partially offset by the mix of merchant sales. The business continues to execute in line with expectations while generating higher cost synergies than eBay expected.
“GSI's profitability is improving as we capitalize on the cost synergies we laid out at the time of the acquisition, resulting in segment margins of 6.1 percent for the quarter, a 330-basis-point improvement from last year,” said Swan.
Regarding ongoing integration, Swan said GSI has 15 clients leveraging ebay.com as a distribution channel to expand their businesses domestically, and a few clients now using eBay to expand their global footprint outside the U.S.
“PayPal is increasingly becoming the way to pay on GSI clients,” added Swan. “PayPal coverage is now more than 90 percent of GSI client volume, and share of checkout is 13 percent. Additionally, 37 GSI clients offer Bill Me Later and 3 clients are adopting PayPal's point-of-sale capabilities. Lastly, GSI is leveraging eBay Inc. technologies and innovation including RedLaser, eBay Now, the PayPal Media Network and Magento to build solutions for clients' needs. GSI is winning new clients and bringing eBay's innovative technology solutions and services to merchants of all sizes.”
Overall, eBay's third-quarter revenue rose 15 percent to $3.4 billion, while profit climbed 14 percent to $718 million, or 55 cents a share.
