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Bloomberg
DoorDash Inc shares jumped after an optimistic earnings report that showed resilient demand for pricey takeout even amid a cost-of-living squeeze. The company also said its president would be stepping down as part of a slate of executive changes.
DoorDash is anticipating adjusted earnings before interest, tax, depreciation and amortisation of $120 million to $170 million in the first quarter, the San Francisco-based company said in a statement.
The midpoint of that range exceeds the $129.7 million Wall Street estimated. The company sees order values of $15.1 billion to $15.5 billion, beating expectations for $14.6 billion.
Consumers are spending on food delivery even though inflation is squeezing budgets and the economic outlook has soured — Uber Technologies Inc reported delivery bookings that beat analysts’ estimates. The prospect for improving profit at DoorDash may be a bright spot for investors who have pared their earnings outlook for tech companies while revenue growth slows.
The company also announced a $750 million stock buyback program, a step other technology companies like Meta Platforms Inc have taken to boost share prices.
“Our results are evidence of our strong execution and proof that customers continue to return to the platform despite
the macroeconomic challenges we’re seeing with inflation,†Chief Financial Officer Prabir Adarkar said in an interview.
The shares rose 6.2% in premarket trading on Friday. DoorDash shares have risen almost 40% this year after tumbling 67% in 2022.
Adarkar will replace
president and Chief Operating Officer Christopher Payne
when he departs the company
on March 1. A former Amazon.com Inc veteran, Payne spent seven years at DoorDash and had most recently been responsible for expansion into new delivery services. The reins of CFO will be handed to Ravi Inukonda, vice president of finance and strategy.
DoorDash commands 65% of food-delivery sales in the US, according to Bloomberg Second Measure.
Sales have slowed since the pandemic-era boom and the company has expanded into new services like grocery and retail delivery to retain customers and attract new ones.
In these newer delivery
categories, Adarkar said DoorDash is “seeing robust signs
of progress,†while revenue broadly rose 40% in the fourth quarter to $1.8 billion, in line with what analysts had
projected.
The expansion efforts have come at a cost.