Dudshash shares have risen by more than 15 percent, as food delivery giants have outperformed quarterly results, indicating that despite vaccination increases, customers are still ordering instead of going to restaurants.
Sales rose 198 percent to $ 1.1 billion in the first quarter ended March 31, beating Wall Street’s expectations. But the company’s $ 110 million deficit dropped surprisingly as a lack of drivers dragged margins down.
Company executives told investors in a letter late Thursday, “The impact of extreme weather events and incentive checks, as well as stronger-than-expected consumer demand, resulted in a meaningful shortage of dashers in the latter half of the first quarter.”
“The Stimulus check posed a particularly acute challenge, as we believe they have led to short-term increases in consumer demand and simultaneous reduction in dasher hours,” the letter said.
The San Francisco-based app increased its guidance for the year from $ 35 billion to $ 38 billion for gross orders ranging from $ 30 billion to $ 33 billion.
Officials wrote in a letter to shareholders, “We are thus encouraged by the observed consumer behavior so far and are more optimistic about our full-year prospects.”
Dordash shares recently changed hands at $ 133.65 on Friday, up more than 15 percent.
According to Bloomberg’s second measure, the company has become a major player in food distribution over the past year, outpacing rival GrubHub by 56 percent in the market.
But experts say that the growth of the industry is certain to be curbed this year as more and more consumers will have to resume eating in restaurants rather than ordering vaccines and going to stores to do their shopping.
According to a recent academic report by Daniel Minh McCarthy, a marketing professor at Emory University’s Googietta Business, the industry’s growth was filled by “artificial demand” after consumers return to their pre-COVID lives. Has been given. school.
The report claimed that the industry was set to reduce growth in 2020, which was swiftly reversed after the COVID-19 ban came into force.
To that end, Dorscheid is expanding beyond food distribution into other categories, including groceries, pet supplies, and flowers.
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