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Grubhub doubles participating restaurants but urges patience on industry turbulence

Grubhub Inc. said it doubled the number of restaurants participating in its online ordering service in just the last three months but warned this week that it may take a little longer to achieve the desired results amid significant changes in the industry. 

Grubhub Founder and CEO Matt Maloney and CFO Adam DeWitt penned a lengthy letter to shareholders as part of the food delivery firm's quarterly earnings report, touting the progress made by expanding from 150,000 to 300,000 participating restaurants, by adding  tens of thousands of smaller and independent restaurants to the delivery network.

However, they noted that results would take time amid a current of changes in the restaurant meal delivery business, including increased competition from rival services and reduced customer loyalty.

"We continue to believe that it will take time for the insight and awareness of such unsustainability to manifest itself in modified behavior, as other players desire to maintain order growth competes with the heightened focus on profitability," they wrote in the letter. 

Grubhub reported a 19% increase in revenue to $341 million during the quarter, compared with $288 million, in the year-ago quarter. 

The company reported a loss of $4.2 million, or 5 cents a share, compared with earnings of $17.6 or 19 cents a year ago. 

Gross food sales increased 13% to $1.6 billion during the quarter, compared with $1.4 billion a year ago. 

Active diners rose 28% to 22.6 million in the quarter, from 17.7 million active diners in the year-ago period. 

Daily average Grubs rose 8% to 502,600 in the quarter, compared with 467,500 in the year-ago period.

The company is forecasting first quarter revenue of $350 million to $370 million and annual revenue of $1.4 billion to $1.5 billion. 

Topics: Delivery

Companies: Grubhub

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