Chriss, who was hired to guide the payments giant through a challenging post-pandemic environment, had been tasked with reviving growth as transaction volumes slowed and rivals—both tech giants and nimble fintech startups—expanded their reach in the payments market.
HP’s Enrique Lores Named New CEO
In a move that underscores the company’s urgency, PayPal appointed HP’s Enrique Lores as its new president and CEO. Lores, who led HP as president and CEO for more than six years, is set to take over on March 1. In the interim, PayPal’s CFO Jamie Miller will serve as acting CEO.
The board said Chriss’ progress did not meet expectations, signaling a sharper sense of impatience as PayPal seeks a clearer turnaround strategy.
Wall Street Questions Strategy After Surprise Shake-Up
Analysts reacted swiftly, questioning whether the new leadership will pursue a more aggressive restructuring or begin exploring strategic options, including potential asset sales.
“The big question is whether he will bring in a formidable payments team to attempt yet another multi-year turnaround or look to start reviewing options for strategic assets,” Evercore ISI analysts said.
Dim Profit Outlook Adds Pressure
PayPal also revised its profit outlook downward. The company now expects full-year adjusted profit to fall between a low-single-digit decline and a slight increase—well below Wall Street expectations for roughly 8% growth, according to LSEG data.
The company also said it would abandon its previous long-term 2027 forecast, opting instead to provide annual guidance only.
The revision reflects weakening consumer spending as inflation and high interest rates continue to strain household budgets. Major retailers and consumer goods companies have already warned of softer demand as shoppers prioritize essentials over discretionary purchases.
“We saw pressure across our retail merchant portfolio, particularly among lower and middle-income consumers,” Miller said during a post-earnings call. “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.”
Earnings Miss Highlights Slowing Momentum
PayPal reported holiday-quarter revenue of $8.68 billion, missing analysts’ expectations of $8.80 billion. Adjusted earnings per share were $1.23, also below the $1.28 estimate.
Branded Checkout Growth Slows
A central focus of Chriss’ tenure was expanding PayPal’s higher-margin branded checkout business. However, growth in this segment decelerated sharply, rising just 1% in the fourth quarter versus 6% a year earlier, driven by weaker U.S. retail demand and international challenges.
PayPal executives said they are taking near-term actions to revive branded checkout momentum but did not provide a clear timeline for when growth might rebound.
Competitive Threats Mount
Investors remain concerned that Big Tech rivals like Apple and Google could erode PayPal’s core market share, despite its long-standing leadership in digital payments.
PayPal’s stock has fallen sharply over the past five years amid ongoing doubts about the company’s turnaround and the competitive pressures it faces