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DoorDash Reports Better-Than-Expected Quarterly Revenue Driven By Strong Demand For Food-Delivery

DoorDash Reports Better-Than-Expected Quarterly Revenue Driven By Strong Demand For Food-Delivery
Online food ordering and food delivery platform DoorDash Inc's expectations of the market for its quarterly revenues as the company reported continued demand for meal delivery even as the US economy is opening up. According to analysts, the continuation of online food delivery demand shows that the food ordering patterns have changed permanently. The estimate-beating performance of the company helped push its shares up by 24 per cent after the close of markets.  
According to analysts, during the peak of the Covid-19 pandemic, consumers were forced to order meals online more frequently than before and that habit apparently has stayed back with consumers and they still desire that meals are delivered at their doorstep. Analysts also believe that companies like DoorDash and its rivals Uber Eats and Grubhub will see continued strong growth in their business for a number of years in the future even as more people have started to eat out at restaurants.
For example, on Wednesday, there was a 1 per cent rise in the stocks of Uber while a 2 per cent surge in the share price of Grubhub parent Just Eat NV was noted on the New York Stock Exchange.
"It's very possible to eat at a restaurant and get delivery because we eat three times or more maybe per day, and that's over 100 shopping moments per month," Chief Executive Officer Tony Xu said on an earnings call.
According to IBES statistics from Refinitiv, analysts had expected DoorDash to report quarterly revenue of $1.28 billion whereas the meal delivery company reported revenue of $1.30 billion which was higher than analysts’ expectations, which was 34 per cent higher year on year. This higher-than-expected performance was driven by consumer retention and new customer growth of the company which was also better than expected.
"To the extent that pent-up demand for dining in would eat into revenue, it would only serve to dampen some growth temporarily, not reverse it for long periods," Guru Hariharan, CEO of e-commerce management platform CommerceIQ, said.
Based in San Francisco, DoorDash also expects the first-quarter marketplace gross order value, which includes all app orders and subscription fees, to be between $11.4 billion and $11.8 billion, compared to $11.2 billion in the previous quarter.
Consumers' ongoing willingness to pay for the convenience of delivery, even in the face of inflation, should underpin demand, according to M Science analyst Matthew Goodman.
To entice more consumers, DoorDash has increased its non-restaurant goods, such as groceries, pet food, and alcohol. Ulta Beauty, Bed Bath & Beyond, and PetSmart are among the retailers with which it has partnered.
For fiscal 2022, DoorDash expects core earnings to range from break-even to $500 million, compared to projections of $455.1 million.

Christopher J. Mitchell

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