DoorDash slips as expectations of weaker delivery demand following vaccine rollout weigh on strong 4th-quarter revenue
A Doordash delivery driver rides his bike in the rain during the coronavirus disease (COVID-19) pandemic in the Manhattan neighborhood of New York City, New York, the United States, on November 13, 2020.
Carlo Allegri / Reuters
- DoorDash shares were down 3% Thursday after acknowledging the possibility of weaker demand in 2021 as COVID-19 vaccinations accelerate.
- Over the past year, grocery suppliers saw an increase in demand from customers ordering groceries and groceries as home stay orders paused.
- For the fourth quarter of 2020, DoorDash had sales of $ 970 million, more than three times the figure for the same period last year.
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DoorDash shares were down 3% on Friday after the food company admitted it could see weaker demand as more people get vaccinated against COVID-19.
As large swaths of the economy shut down in 2020 to contain the spread of the virus, food utilities like Uber Eats, Grub Hub and Postmates saw demand spike. But if the economy opens again, demand for supplies could fall when people go out to eat again.
“Our forecasts for 2021 are based on the assumption of an accelerated reopening of the market and a return to in-store dining,” said the company’s chief financial officer, Prabir Adarkar, during the earnings statement on Thursday. “We recognize that vaccinations and full reopenings can lead to sharper changes in consumer behavior than current data would predict.”
The San Francisco-based company expects adjusted EBITDA between $ 0 and 45 million for the full year and between $ 0 and $ 200 million for the full year. The gross order value is expected to be between $ 8.6 billion and $ 9.1 billion for the first quarter and between $ 30 and $ 33 billion for the full year.
The company also cautioned about its Adjusted EBITDA, and take rate could be negatively impacted by new changes, including Proposition 22, a law that classifies drivers as contractors.
Prop 22 mandates that drivers, even if they are contractors, receive the minimum wage and receive additional benefits.
“We have additional costs due to Prop 22, which for the most part didn’t exist in 2020,” Adarkar said during the call. “And so, you will see a decrease in our take rate in 2021 due to those additional Prop 22 costs that we intend to cover the vast majority of.”
For the fourth quarter of 2020, the first report since it went public, the company had sales of $ 970 million, more than three times its $ 300 million for the same period last year. A loss of $ 2.67 per share was also reported.
On GAAP net income, DoorDash announced a loss of $ 312 million, primarily due to IPO-related expenses. However, it was nearly triple the GAAP net loss of $ 123 million for the same period last year.
Doordash went public in early December and opened at $ 182, which was 78% above its IPO price.