DoorDash hikes annual core growth outlook as delivery demand holds strong
2022.08.05 00:07
A Doordash delivery bag is seen in Brooklyn, New York City, U.S., May 9, 2022. REUTERS/Andrew Kelly
(Reuters) -DoorDash Inc raised its annual target for a key industry metric on Thursday, betting that consumers would stick to ordering in even as decades-high inflation and a return to pre-pandemic lifestyles raise concerns around demand.
Shares in the U.S. food delivery firm surged 11% in extended trading, as it also topped Wall Street estimates for revenue and scaled an all-time high of 426 million orders in the second quarter.
Consumers have become accustomed to the convenience of ordering food from their homes on the back of a two-year long global pandemic, fueling sales at DoorDash.
DoorDash now 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.
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 offering more flexibility and implementing initiatives such as cashback offers to help drivers combat soaring fuel prices.
The San Francisco-based company said the rate of organic acquisition of DoorDash drivers – called Dashers – touched a record high in the quarter.
Rival and Uber Eats owner Uber Technologies (NYSE:UBER) Inc had made similar comments on Tuesday when the company said it added more delivery agents and drivers in the quarter, taking the total number to a record high of about 5 million.
Doordash’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, the company’s net loss widened to $263 million, or 72 cents per share in the quarter, from $102 million, or 30 cents per share, a year earlier, owing to heavy investments it made to expand internationally and into non-food categories.
