(Reuters) - Online food delivery company GrubHub reported stronger-than-expected quarterly profit and revenue on Tuesday, but the number of customer orders fell below analysts’ estimates, triggering a 9 percent drop in its shares.
GrubHub’s daily average grubs, or the number of orders placed by customers, were 436,900, missing analysts’ estimates of 442,480, according to FactSet. Its gross food sales of $1.2 billion also fell short of expectations.
“Following a 42 percent gain year to date, expectations were high,” Argus Research analyst John Staszak said. “Daily Average Grubs and Gross Food Sales were a little light.”
The company said it had 15.1 million active diners in the first quarter ended March 31, roughly in line with analysts’ average estimate of 15.06 million, according to FactSet.
Chicago-based GrubHub defines active diners as the number of unique customer accounts from which an order has been placed in the past 12 months.
GrubHub has gobbled up a handful of smaller players in a highly competitive food delivery market, which has seen the entry of Amazon.com Inc’s (AMZN.O) Amazon Restaurants and Uber [UBER.UL] with Uber Eats.
Over the past year, GrubHub has acquired Yelp Inc’s (YELP.N) food delivery platform Eat24, Foodler Inc and OrderUp.
The company’s chief financial officer, Adam DeWitt, said the quarter’s results were mostly about newer markets, including Houston, Dallas, Phoenix and Atlanta, and that it was seeing very good growth trends there.
“This is the best quarter we had in terms of net new restaurant adds,” DeWitt told Reuters.
The company also forecast revenue in the range of $228 million to $236 million for the current quarter, compared with analysts’ estimate of $229.3 million.
Net income attributable to common stockholders rose to $30.8 million, or 34 cents per share, in the latest quarter from $17.7 million, or 20 cents per share, a year earlier.
Total revenue rose 49 percent to $232.6 million. Excluding items, the company earned 52 cents per share.
Analysts on average had expected the company to earn 38 cents per share and a revenue of $229.3 million, according to Thomson Reuters I/B/E/S.
Shares of the company have more than doubled in the past 12 months.
Reporting by Arjun Panchadar in Bengaluru; Editing by Amrutha Gayathri and Anil D'Silva