DoorDash sees food orders declining in second half; shares fall 12%

FILE PHOTO: A DoorDash sign is pictured on a restaurant on the day they hold their IPO in the Manhattan borough of New York City, New York, U.S., December 9, 2020. REUTERS/Carlo Allegri

(Reuters) – Food delivery company DoorDash Inc on Thursday forecast orders to decline in the back half of the year as COVID-19 vaccine rollouts speed up and consumers begin to venture out nearly a year after staying indoors.

San Francisco-based DoorDash’s shares fell 12% in extended trading after it posted a bigger quarterly loss in its first results as a public company following its blockbuster initial public offering last year.

The company, which rivals Uber Eats, GrubHub Inc and Postmates Inc, saw sales boom as consumers heavily depended on ordering in due to government-ordered restrictions and fearing they would contract the coronavirus.

DoorDash’s growth during the pandemic implies consumers are willing to spend a few extra dollars for the convenience. But the vaccine rollouts speeding up and consumers returning to stores would coincide with seasonally softer second and third quarters, it said.

“Our forecast assumes increasing consumer churn, reduced order frequency at the cohort level, and slightly smaller average order values beginning in Q2,” Chief Executive Officer Tony Xu wrote in a letter to shareholders.

For the current quarter, it forecast gross order value to be in a range of $8.6 billion to $9.1 billion. In the fourth quarter ended Dec. 31, they rose 227% to $8.2 billion.

The company also forecast first-quarter adjusted earnings before interest, taxes, depreciation, and amortization to take a hit from recently imposed caps on fees it collects from restaurants.

Fourth-quarter revenue rose more than tripled to $970 million. But net loss widened to $312 million from $134 million a year earlier.

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