Copyright Reuters
Shares of the company, which had initially jumped 17% after PayPal announced a partnership with OpenAI and reported blowout results, pared some gains during the conference call as investors digested Miller's comments. The stock was last up 10%. Sign up here. U.S. companies across industries are feeling the squeeze from a widening gap between lower-income and affluent consumers, with tariffs adding further uncertainty, as seen in third-quarter earnings reported so far. "We're seeing basket sizes just trade down. Average order value being down, particularly in retail where you know consumers are just being more selective, and that behavior has continued into October," Miller said. The shift, echoed by major retailers and consumer goods companies, points to a slowdown in discretionary purchases, even as everyday spending remains steady, leaving the payments sector largely on firm footing. PayPal forecast current-quarter adjusted EPS between $1.23 and $1.27, below Street expectations of $1.31 according to estimates compiled by LSEG. "Worries over a weaker jobs market in the U.S., signs of financial strain among lower-income families and the slower-than-hoped rate of interest rate cuts from the U.S. Federal Reserve have all added a cyclical element to more structural concerns," said Russ Mould, investment director at AJ Bell. However, the year-end holiday season, typically a strong period for retailers and payment firms, could help lift spending in the next couple of months. Retailers typically rely on the fourth-quarter holiday season for a large portion of annual sales, with spending during Christmas, Black Friday and Thanksgiving helping boost purchases. "The holiday season is very back-end loaded. So it's something we're watching," Miller added. Reporting by Manya Saini in Bengaluru; Editing by Krishna Chandra Eluri Our Standards: The Thomson Reuters Trust Principles., opens new tab Manya reports on prominent publicly listed U.S. financial firms, including Wall Street’s biggest banks, card companies, asset managers, and fintechs. She also covers late-stage venture capital funding, initial public offerings on U.S. exchanges, and regulatory developments in the cryptocurrency industry. Her work appears in the finance, markets, business, and future of money sections of the Reuters website. A passionate reader, she loves books across genres, from classics to contemporary fiction. She holds an undergraduate degree in Political Science from the University of Delhi and a master’s in journalism from the Symbiosis Institute of Media and Communication.
