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Grubhub sales beat estimates with more Covid takeaway diners
[NEW YORK] Grubhub reported third-quarter revenue that beat analysts' estimates as the Covid-19 pandemic boosted the number of diners ordering delivery.
Sales rose 53 per cent to US$494 million for the three months ended Sept 30, the Chicago-based restaurant delivery company said on Wednesday in a statement. Analysts had projected US$436.6 million, according to data compiled by Bloomberg. As the pandemic keeps people home and limits indoor dining, Grubhub saw a 41 per cent increase in the number of diners regularly ordering delivery from a year earlier.
The company posted profit excluding some costs of US$15.2 million, or 16 US cents a share. While that was a decrease from the year earlier period, analysts had been projecting a loss of five US cents a share. The company's bottom line has taken a hit since it began discounting food for diners and reducing or eliminating delivery fees at the start of the pandemic to spur business and help ailing restaurant partners.
Food-delivery companies including Uber Technologies' Uber Eats division, DoorDash and Postmates struggled to make money even before the pandemic. The companies have been roiled by rising costs from promotions, reduced commissions and safety equipment amid the Covid-19 crisis, fuelling competition and consolidation.
Grubhub was bought by Dutch delivery company Just Eat Takeaway.com for US$7.3 billion in June. The deal is expected to close in the first half of 2021. Uber, which had also eyed Grubhub, announced in July that it would buy Postmates for US$2.65 billion.
Because of its pending merger, Grubhub is no longer providing earnings guidance and won't host a conference call to discuss its third-quarter results.
Grubhub's shares jumped 3.7 per cent in extended trading after closing at US$75.49. They have gained more than 50 per cent this year.