Paypal shares fell 19% soon after the company replaced its CEO and issued a lackluster forecast for 2026. The company’s board had named HP’s Enrique Lores as its CEO and president, replacing Alex Chriss who was bought in to steer the payments firm through slowing growth and heightened competition.
The board said the pace of change and execution under Chriss was not in line with its expectations.
PayPal said Chief Financial Officer Jamie Miller would serve as interim CEO until Lores assumes the role on March 1. Lores was the president and CEO at consumer electronics giant HP for more than six years.
Wall Street analysts said the unexpected change of CEO raises questions about Paypal’s turnaround strategy.
Data compiled by LSEG indicates that Paypal expects full-year adjusted profit to range between a low-single-digit percentage decline and a slight increase, compared with Wall Street expectations of about 8% growth. Miller said that the company was no longer committing to the specific 2027 outlook laid out at its investor day last year and would now provide forecasts one year at a time.
This comes at a time of weakened retail spending, with shoppers facing higher interest rates, high costs of living, and signs of a softening labour market causing them to cut down on discretionary spending.
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“We saw pressure across our retail merchant portfolio, particularly among lower and middle-income consumers,” Miller said in a post-earnings conference call with analysts. “While part of this can be attributed to macro factors and a K-shaped economy, it’s also clear that we need to do more to win with key merchants, particularly during high-volume shopping periods.”
PayPal reported revenue of $8.68 billion for the holiday quarter, missing analysts’ average estimate of $8.80 billion, according to data compiled by LSEG. Adjusted profit was $1.23 per share during the three months ended December 31, also below expectations of $1.28.
Growth of Paypal’s higher-margin branded checkout business has been a point of major focus for outgoing CEO Chriss, who pushed for “profitable growth” while aiming to streamline costs tied to unbranded processing.
Online branded checkout growth decelerated to 1% in the fourth quarter, compared with 6% a year earlier, driven by weakness in U.S. retail, international headwinds and tougher comparisons.
Paypal recently applied to become a bank in the U.S, saying that this would help it increase its lending to small businesses. The company had said it submitted applications to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation to create PayPal Bank.