DoorDash results impress as taste for takeout defies inflation
Reuters
Published Nov 03, 2022 04:19PM ET
Updated Nov 03, 2022 07:22PM ET
By Ananya Mariam Rajesh
(Reuters) -Food delivery firm DoorDash Inc's orders surged to a record high in the third quarter as demand held strong against higher prices and rising inflation, helping it beat Wall Street targets for revenue and sending shares up 10% on Thursday.
Even though dining out has resumed in force, people are still ordering food online from the comfort of their homes like they did during lockdowns.
DoorDash has, however, started to see a bit of an impact from recession-wary people buying fewer items each time they order, a company spokesperson said.
Still, for the time being, all was rosy as it recorded 439 million orders in the quarter and a 30% rise in gross order value - the total value of all app orders and subscription fees - to $13.53 billion.
Apart from food, categories such as grocery, convenience and retail also did well. "Retail and grocery partnerships will be a growth driver for DoorDash, which will also create an opportunity for higher average order value," Third Bridge analyst Nicholas Cauley said. DoorDash forecast fourth-quarter gross order value of between $13.9 billion and $14.2 billion, and reiterated full-year expectations for the key industry metric.
Labor shortages have been a concern for U.S. delivery companies, but UberEats parent Uber Technologies (NYSE:UBER) Inc said on Tuesday active drivers were back to levels seen before the pandemic in September 2019.
DoorDash said it has not been affected by driver shortages except in the first quarter of 2021, when the U.S. government issued its second round of stimulus checks to help people cope with the pandemic. The company's revenue rose 33% to $1.70 billion in the third quarter, surpassing analysts' estimates of $1.63 billion, according to IBES data from Refinitiv. However, the San Francisco-based firm posted a bigger-than-expected net loss of $295 million, or 77 cents per share.
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Written By: Reuters
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