Oct 28 (Reuters) - Shares of GrubHub Inc tanked 30% in extended trading on Monday, after the online food delivery company warned of slowing growth as customers prefer to switch between rival providers for better deals.
The company also reported lower-than-expected quarterly results and forecast fourth-quarter revenue sharply below Wall Street expectations.
Chicago-based GrubHub is battling startups ranging from DoorDash and Postmates to Uber Technologies Inc’s UberEats for a bigger share of the takeout market in the United States.
The company estimated that the market, including pickup and delivery, is greater than $200 billion annually.
“We believe online diners are becoming more promiscuous,” the company said in a letter to shareholders. “Our newer diners are increasingly coming to us already having ordered on a competing online platform, and our existing diners are increasingly ordering from multiple platforms.”
GrubHub said the competition had a more than 300 basis points impact on third-quarter results.
The company forecast fourth-quarter revenue to be between $315 million and $335 million, below analysts’ expectations of $387.5 million, according to IBES data from Refinitiv.
For the quarter ended Sept. 30, net income fell to $1 million or 1 cent a share, from $22.7 million, or 24 cents per share, a year earlier.
Excluding items, it earned 27 cents per share.
Revenue rose 30% to $322.1 million, but missed estimate of $330.5 million. (Reporting by C Nivedita in Bengaluru; Editing by Sriraj Kalluvila)