FTSE: Deliveroo warns of lower sales as cost of living crisis hits takeaway orders
Deliveroo (ROO.L) has warned that full-year sales growth will come in at the lower end of expectations as it faces “ongoing economic uncertainty”.
Orders grew 5% in the UK during the third quarter, while the size of orders increased too. However, order numbers contracted 7% internationally, reflecting summer seasonality in European markets and current consumer headwinds.
Read more: Millions struggling to pay bills as cost of living surges
The squeeze on household budgets due to inflation has pushed people to cut back on take-aways, hurting the food delivery company.
Still, shares were unfazed by the news of a weaker outlook.
Deliveroo jumped 2.6% on Friday after the food delivery company upgraded its adjusted earnings (EBITDA) margin guidance and said that it was confident it could adapt to the worsening economic outlook.
Full-year gross transaction value (GTV) growth was expected to be between 4% and 8%, the lower part of the previously announced 4% to 12% range.
This is the second downgrade, as in July Deliveroo expected growth between 15% and 25%.
“During the quarter, we delivered continued GTV growth year-on-year, strengthened our value proposition and made further progress on our path to profitability. Since June, the year-on-year GTV growth trend has been broadly stable, despite the ongoing economic uncertainty,” Will Shu, founder and CEO of Deliveroo, said.
Read more: UK inflation back to double-digits as price rises hit 10.1%
“Throughout 2022 we have been adapting financially to the operating environment and driving forward on our path to profitability, and we now expect the H2 2022 adjusted EBITDA margin to be better than our previous guidance. We continue to be excited about the opportunity ahead and our ability to capitalise on it,” he added.
GTV per order has increased quarter-by-quarter since 2021 and reached £23.40 in the third quarter of 2022.
