DoorDash rides resilient delivery demand to raise key forecast

This post was originally published on this site

(Reuters) -DoorDash Inc raised its annual target for a key industry metric on Thursday, saying it does not expect a slowdown in demand as consumers continue to order in despite decades-high inflation, sending its shares up nearly 15%.

The U.S. food delivery firm expects gross order value – the total value of all app orders and subscription fees – to be around $51 billion to $53 billion for 2022, compared with the $49 billion to $51 billion range estimated previously.

DoorDash also topped Wall Street estimates for revenue and scaled an all-time high of 426 million orders in the quarter, signaling that Americans have not put a pause on food deliveries even as they return to restaurants after a pandemic-induced pause.

Even as higher prices prompted customers to purchase slightly fewer items per order on average, DoorDash has so far not seen changes in the way consumers engage on its platform.

“We have not seen evidence of a consumer slowdown,” executives said in a letter to shareholders, but noted the company’s order volume would have been stronger in a healthier discretionary spending environment.

While a nationwide labor shortage has jolted companies across sectors and created a shortage of delivery drivers, DoorDash has been able to add more riders by implementing initiatives such as cashback offers to help drivers combat soaring fuel prices.

DoorDash said the rate of organic acquisition of DoorDash drivers touched a record high in the second quarter.

The San Francisco-based firm’s revenue jumped 30% to $1.6 billion in the three months ended June 30, while analysts polled by Refinitiv were expecting $1.52 billion.

Still, quarterly net loss stood at $263 million, or 72 cents per share – much wider than the 41-cent loss analysts expected – owing to heavy investments it made to expand internationally and into non-food categories.