GrubHub’s stock drops after downbeat DAG view, ‘slightly improved’ revenue outlook

Shares of GrubHub Inc. GRUB, -11.99% sank 8.1% in morning trading Monday, after the online food-ordering and delivery service said it experienced a decrease in orders the last couple weeks of March, particularly in its corporate business, and now expects first-quarter daily average grubs (DAGs) to be “up flattish” from a year ago. Revenue, however, is expected to be “slightly above” the midpoint of previous guidance. The FactSet DAG consensus of $538.7 implies 3.4% growth, while the revenue consensus of $358.1 million is slightly below the $360 million midpoint of its $350 million to $370 million guidance range. So far in April, DAG growth has been about 10%. The second-quarter FactSet DAG consensus of $521.2 million implies 6.6% growth. The company said its corporate business was “dramatically” impacted as nearly all of its corporate clients shifted to work-from-home models. And in New York City, consumer activity was affected more than in other cities, as NYC residents chose to temporarily leave the city and were cooking at home more. GrubHub’s stock has lost 14.8% year to date, while the S&P 500 SPX, -1.01% has declined 14.2%.

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