Grubhub profit better than expected; shares jump 5.3 percent

LOS ANGELES (Reuters) - Grubhub Inc's reported a first-quarter profit on Thursday that topped Wall Street's view after the restaurant delivery service ramped up spending to encourage customers to order more often and spend more.

Reuters April 26, 2019 04:05:28 IST
Grubhub profit better than expected; shares jump 5.3 percent

Grubhub profit better than expected shares jump 53 percent

LOS ANGELES (Reuters) - Grubhub Inc's reported a first-quarter profit on Thursday that topped Wall Street's view after the restaurant delivery service ramped up spending to encourage customers to order more often and spend more.

It shares rose 5.3 percent to $73.50.

Grubhub, which is battling startups ranging from DoorDash and Uber Eats to Amazon.com Inc's Amazon Restaurants, has swept up more than a half-dozen companies since its April 2014 initial public offering and has been spending aggressively to expand its delivery network.

The first quarter included an increase in diners, improved quality and stable costs, the company's chief financial officer, Adam DeWitt, said.

Active diners grew 28 percent to 19.3 million during the quarter, bolstered by partner Taco Bell's February debut of a national campaign promoting delivery from the fast-food chain. Daily Average Grubs, the average daily number of orders for a given period, rose 19 percent to 521,000.

Gross food sales increased 21 percent to $1.5 billion.

Grubhub's first-quarter net income fell 78 percent to $6.9 million, or 7 cents per share, versus a year ago.

Excluding items, it earned 30 cents per share, beating analysts average estimate of 25 cents per share, according to IBES data from Refinitiv.

Revenue jumped 39 percent to $323.8 million during the quarter, topping analysts' estimate of $323 million.

Total costs and expenses climbed 57 percent to $314.9 million during the quarter. That included sales and marketing outlays of $78.5 million, up almost 61 percent from a year earlier.

(Reporting by Lisa Baertlein in Los Angeles; Editing by Leslie Adler)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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