Grubhub Inc. (NYSE: GRUB) reported a 96% dip in earnings for the third quarter of 2019 due to higher costs and expenses. The results missed analysts’ expectations. The company guided fourth-quarter revenue below consensus estimates. Following this, the stock plunged by 33% in the premarket session.
Net income plunged by 96% to $1.01 million or $0.01 per share. Adjusted earnings dropped by 40% to $0.27 per share. Revenues jumped by 30% to $322 million.
Looking ahead into the fourth quarter, the company expects revenue in the range of $315 million to $335 million and adjusted EBITDA in the range of $15 million to $25 million. The company will be hurt by lower orders, increased spending, and inclusion of additional free delivery and promotional support for certain enterprise partners.
For the third quarter, active diners increased by 29% year-over-year to 21.2 million. Daily Average Grubs rose by 10% to 457,300 from the previous year’s quarter. Gross Food Sales grew 15% year-over-year to $1.4 billion.
The company had a positive impact on its business and long-term shareholder value driven by its investments in delivery market coverage expansion, increase new diner advertising, and accelerate enterprise brand sales efforts. However, Grubhub faced with an increase in costs associated with the investments.
The total market for takeout in the US, including pickup and delivery, is greater than $200 billion annually. In the last decade, the online sales of takeout have exploded due to easy ordering, diversity of choice, and superior control and transparency.
The company believes there is still significant opportunity for long-term top and bottom-line growth in the over $200 billion takeout market, which still largely remains offline. Grubhub is expected to spend more and seek many different strategies over the next 12-18 months to increase the restaurant supply aggressively.
Most Popular
What to look for when CVS Health (CVS) reports Q3 earnings
Healthcare company CVS Health Corporation (NYSE: CVS) is all set to report earnings next week, with Wall Street expecting a mixed outcome. The company has been facing challenges in certain
eBay (EBAY): A few factors that helped drive growth in Q3 2024
Shares of eBay Inc. (NASDAQ: EBAY) stayed green on Friday. The stock has gained 32% year-to-date. The ecommerce leader delivered revenue and earnings growth for the third quarter of 2024,
CVX Earnings: Chevron reports lower revenue and profit for Q3 2024
Energy exploration company Chevron Corporation (NYSE: CVX) on Friday announced third-quarter 2024 financial results, reporting a decline in net profit and revenues. Net income attributable to Chevron Corporation dropped to
