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DoorDash lifts 2022 core growth target after revenue jumps 35% – Metro US

DoorDash lifts 2022 core growth target after revenue jumps 35%

FILE PHOTO: FILE PHOTO: A DoorDash sign is pictured on
FILE PHOTO: FILE PHOTO: A DoorDash sign is pictured on a restaurant in the Manhattan borough of New York City

By Praveen Paramasivam

(Reuters) -DoorDash Inc raised its full-year forecast for a key industry metric on Thursday, indicating it has largely skirted labor woes that have plagued most sectors to ensure seamless delivery of food and groceries.

Shares of DoorDash surged 9% after it also reported a better-than-expected 35% jump in quarterly revenue, while allaying investor concerns that an easing pandemic would prompt people to eat out more and order in less.

The company’s image as an enabler of gig economy has helped attract a steady stream of delivery agents, unlike Domino’s Pizza and Pizza Hut that have struggled to maintain their fleet of riders in a tough labor market.

DoorDash has managed to hold on to its delivery agents due in part to its move to ease the pressure of higher gas prices by offering cash backs and simplifying the process of working with the company, CFO Prabir Adarkar told Reuters.

The company now estimates gross order value, the total value of all app orders and subscription fees, of $49 billion to $51 billion for 2022, compared with its prior range of $48 billion to $50 billion.

“Consumers like convenience. They like the benefit of being able to get food and goods delivered to their front door. As they start using the product, they build a habit and increase the usage over time,” Adarkar said.

Data from YipitData showed DoorDash’s market share in the U.S. food delivery sector improved by one percentage point to 57% in March, with Grubhub ceding ground.

For the first quarter, however, DoorDash’s loss per share widened to 48 cents from 34 cents last year, as it invested heavily in building out its delivery network for groceries and other essentials as well as expanding its international business.

Revenue was $1.46 billion for the quarter ended March 31. Analysts were expecting a loss of 41 cents per share on revenue of $1.38 billion, according to IBES data from Refinitiv.

(Reporting by Praveen Paramasivam in Bengaluru; Editing by Anil D’Silva)

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