GrubHub

Grubhub’s revenue jumped 38% in the fourth quarter as the food delivery service added markets and customers, though profit missed analysts’ estimates.

As The Wall Street Journal reports, GrubHub, which went public in April 2014, “has grown rapidly, generating increasing profit by charging restaurants a commission on orders booked through its service.”

Some analysts, however, had questioned whether its rate of growth was sustainable, noting it has been expanding into markets where food delivery isn’t as popular.

For the fourth quarter, though, gross food sales rose 27% year over year to $818 million while active diners — customers who placed at least one order in the previous 12 months — increased 21% to 8.17 million, accelerating sequentially from the 19% growth reported in the third quarter.

“We are firing on all cylinders,” CEO Matt Maloney said in an earnings call.

GrubHub reported a fourth-quarter profit of $13.6 million, or 16 cents a share, up from $11.3 million, or 13 cents, a year earlier. Revenue jumped 38% to $137.5 million.

On an adjusted basis, earnings rose to 23 cents from 19 cents. Analysts polled by Thomson Reuters had forecast earnings of 25 cents on $137.3 million in revenue.

Maloney told the WSJ that slowing in consumer discretionary spending and restaurant categories impacted the bottom line. In trading Wednesday, the company’s shares fell 2.5% to $40.26, but the stock price has still more than doubled over the past year.

Grubhub competes with food-delivery services from other companies including Amazon, Uber, and Yelp. It is now in 70 markets and added Denny’s, Einstein Bros. Bagels, Red Robin Gourmet Burger, and Hooters as corporate delivery customers in the fourth quarter.

The company is expecting first-quarter revenue in the range of $148 to $156 million, and $620 to $660 million for the full year. In 2016, it had $493.3 million in revenue.

“We enter 2017 well positioned to press our market leading advantage and give Grubhub growth momentum for years to come,” Maloney said.

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