just-eat takeaway slows
DASH is short. Grubhub has its problems in North America, but the (5%) decline in order growth is not a good data point for DASH. The rumor that the company is slowing headcount growth points to signs of slowing. But what about profitability?
TKWY reported order growth (1.0%) vs consensus +4.0%; North America (5%); Northern Europe +4%; UK & Ireland 0%; Southern Europe & ANZ (4%). The North American segment includes the U.S. and Canada. The Northern Europe segment consists of Austria, Belgium, Denmark, Germany, Luxembourg, Norway, Poland, Switzerland, Slovakia, and the Netherlands. The Southern Europe and ANZ segment refer to Australia, Bulgaria, France, Israel, Italy, New Zealand, Portugal, Romania, and Spain.
"During the pandemic time, we benefited from a rapidly increasing consumer base in a short period of time, adding much more consumers than normal, resulting in the exceptional growth of the active user base. In the transition period, we see the new consumer acquisition back at normal levels. We are now temporarily experiencing a corresponding higher than normal absolute churn level despite a lower relative churn level of this new consumer group versus pre-pandemic cohorts."
As a result, growth in 2Q22 will remain challenging, but only for one quarter? The company said, "we believe that we will see growth picking up again as we return to normal in the second half of this year." This is not going to be a one-quarter problem.
The company lowered guidance to focus on improving profitability in 2022. As a result, the company is forced to announce that they are currently working "with our advisors actively exploring the introduction of a strategic partner into and/or the partial or full sale of GrubHub." The company said GTV to grow by mid-single-digits in 2022 versus previously mid-teens and 2022 adjusted EBITDA margin in the range of minus 0.5% to minus 0.7% and positive adjusted EBITDA for the full year of 2023.
If industry growth is slowing and DASH is burning cash, will DASH need to focus more on profitability? Neither outcome is a positive for the stock.
CMG SUPPLY CHAIN
Chipotle Mexican Grill's biggest issue getting to 6,000 stores is its supply chain. Sourcing the type of ingredients the menu/brand mission needs will be challenging. The company announced a $50M new venture fund to help expand the number of suppliers (SBUX did a similar thing in coffee). Cultivate Next intends to make early-stage investments into strategically aligned companies that further the company's mission to Cultivate a Better World or can supply CMG over the next ten years.
Kroger to hire associates for grocery delivery in South Florida
Grocery delivery is very competitive, and the competitors are better capitalized than DASH
This summer, KR is hiring more than 200 associates to serve the South Florida market, providing service to area residents. The company is recruiting drivers and associates in vital areas such as logistics and human resources. Andrea Colby, eCommerce corporate affairs and communications manager, said, "The service combines the efficiency of technology with the experience of our associates to deliver fresh, affordable groceries directly to customers' homes."
