Shares of Grubhub (GRUB) - Get Report fell Monday after the food-delivery company described a roller-coaster first quarter - strength, followed by weakness, followed by strength amid the coronavirus pandemic - and withdrew its earnings estimate for full-year 2020.
As for the first quarter, Grubhub expects revenue and adjusted earnings before interest, taxes, depreciation and amortization to be slightly above the midpoints of its Feb. 5 guidance.
“While the business was trending at or above the high end of our guidance range for the first 10 weeks of the quarter, like most businesses, we experienced a swift change in customer behavior in the middle of March, when the pandemic took hold across the country,” the Chicago company said in a statement.
“Initially, we observed a decrease in orders across our entire business, as the news upended typical routines and there was considerable uncertainty about what day-to-day life would be like.”
But things have changed. “Exiting the first quarter and in the beginning of the second quarter, we have seen trends improve significantly,” the company said.
“So far in April our overall year-over-year [daily average grub] growth has been approximately 10%.”
As for earnings going forward, “while we are confident we could generate meaningful profits in the second quarter that would keep us comfortably on the previously announced path to deliver at least $100 million of adjusted Ebitda in 2020, we are instead planning to reinvest most of the profits we expect to generate during the second quarter into programs that directly drive more business to our restaurant partners,” the company said.
Grubhub shares recently traded at $41.11, down 8.8% They're down 18% in the past three months.