Lucas Jackson/Reuters
- GrubHub, the online food-delivery service, reported disappointing earnings Monday that showed slower-than-expected growth.
- Shares fell as much as 40% in regular trading on Tuesday.
- The company attributed its performance to diner “promiscuity” and increased competition.
- Watch GrubHub trade live on Markets Insider.
GrubHub lost more than one-third of its market value after the company’s third-quarter earnings report Monday disappointed investors and sent shares falling.
Shares of the food delivery service plummeted as much as 40% in regular trading on Tuesday.
Here’s what GrubHub reported versus what analysts surveyed by Bloomberg expected:
- Earnings per share: 27 cents reported versus 27 cents (expected)
- Revenue: $322 million reported versus $330 million (expected)
The company — which also owns Seamless, LevelUp, and AllMenus — lowered its expectations for fourth-quarter revenue, which includes the holiday season, and now expects a range of $315 million to $335 million, below analyst expectations of $388 million.
GrubHub attributed its lackluster earnings and slowing growth to increased competition in the industry. “The easy wins in the market are disappearing a little more quickly than we thought,” the company wrote in a long letter to shareholders.
The company said that “online diners are becoming more promiscuous,” referring to what they see as eroded platform loyalty that previously drove growth. Now, with competition from Uber Eats, DoorDash, and Postmates, GrubHub is struggling to keep up.
In the third quarter, GrubHub reported that the number of active diners grew 29% to 21.2 million, up from 16.4 million a year ago. But, at the same time, daily average grubs, or DAGs, grew only 10% from a year prior, the company said.
Long term, the company said it believes that DAGs will settle in the “low double digits.”
GrubHub was down 24% for the year through Monday’s close.
