Grubhub Sales Beat Estimates With More Covid Takeout Diners
Grubhub Inc. reported third-quarter revenue that beat analysts’ estimates as the Covid-19 pandemic boosted the number of diners ordering delivery.
Sales rose 53% to $494 million for the three months ended Sept. 30, the Chicago-based restaurant delivery company said Wednesday in astatement. Analysts had projected $436.6 million, according to data compiled by Bloomberg. As the pandemic keeps people home and limits indoor dining, Grubhub saw a 41% increase in the number of diners regularly ordering delivery from a year earlier.
The company posted profit excluding some costs of $15.2 million, or 16 cents a share. While that was a decrease from the year earlier period, analysts had been projecting a loss of 5 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 includingUber Technologies Inc.’s Uber Eats division,DoorDash Inc. andPostmates Inc. 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, fueling competition and consolidation.
Grubhubwas bought by Dutch delivery companyJust Eat Takeaway.com NV for $7.3 billion in June. The deal is expected to close in the first half of 2021. Uber, which had alsoeyed Grubhub, announced in July that it would buy Postmates for $2.65 billion.
Read more: Uber Charts Path to Long-Elusive Profit With Postmates Deal
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% in extended trading after closing at $75.49. They have gained more than 50% this year.
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