DoorDash to Show Narrower Annual Loss as Growth Continues
February 25 2021 - 5:59AM
Dow Jones News
By Preetika Rana
DoorDash Inc.'s first results as a public company are expected
to show the food-delivery app growing at a blistering pace while
trimming its yearly loss.
Analysts polled by FactSet expect revenue in 2020 to jump more
than threefold to $2.85 billion from $885 million a year earlier,
as demand for food delivery skyrocketed during widespread
shelter-in-place orders. Fourth-quarter revenue is also expected to
more than triple to $938 million.
Food delivery has been an expensive logistical undertaking,
however. DoorDash turned a surprise profit in last year's second
quarter but has never posted a full-year profit. Analysts expect
the company's 2020 loss to narrow to $318 million from $667 million
a year earlier. But they predict fourth-quarter loss will widen to
$153 million from $134 million in the year-earlier period.
DoorDash made its debut on the stock market in December
alongside home-sharing giant Airbnb Inc., which also reports its
first earnings as a public company on Thursday. Both companies are
scheduled to report their results after market hours. DoorDash's
shares have climbed 73% from their IPO price as of Wednesday's
close. Its more than $56 billion market capitalization makes it is
more valuable than Chipotle Mexican Grill Inc. and Domino's Pizza
Inc. combined.
Consumers are more reliant on food-delivery services than ever
before. DoorDash leapfrogged rivals Uber Technologies Inc.'s Eats
and Grubhub Inc. to command nearly half the U.S. food-delivery
market in mid-October, up from one-third a year earlier. Its
monthly subscribers have more than tripled between January and
September.
Some restaurants are pushing back against the high fees that
food-delivery apps can charge -- up to 30% of an order -- by
driving more orders toward their websites and putting idle staff on
delivery duty. Regulators in cities including New York, San
Francisco and Seattle have stepped in to cap app fees, in an
attempt to rein in costs for restaurants.
Grubhub's fourth-quarter loss widened compared with a year
earlier as these caps hurt its bottom line, among other things.
Uber Eats trimmed its losses in the fourth-quarter.
DoorDash has said it spent millions of dollars to support small
restaurants through grants and free marketing during the pandemic.
It also waived commissions for restaurants with five or fewer
outlets in the initial months of the health crisis.
The company's sales and marketing costs, which include deep
discounts to consumers, rose 34% year over year to $900
million.
Write to Preetika Rana at preetika.rana@wsj.com
(END) Dow Jones Newswires
February 25, 2021 05:44 ET (10:44 GMT)
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