Just Eat shares drop as falling takeaway orders in North America hit Grubhub owner's sales

By Louis Goss

Just Eat Takeaway.com shares fell 5% on Wednesday after the food delivery company which owns Grubhub reported a drop in its sales in the first quarter of 2024, driven by plunging takeaway orders in North America.

The Dutch multinational, which was formed through the merger of London company Just Eat and Amsterdam company Takeaway.com, saw its total orders drop 6% in the first three months of 2024, as it processed fewer orders in all regions outside the U.K. & Ireland.

This saw the gross transaction value of orders made on its food delivery platform fall 2%, to EUR6.55 billion, as a sharp drop in the value of sales in its largest North American segment offset a return to growth in the U.K.& Ireland and Northern Europe.

Shares in Just Eat Takeaway.com (NL:TKWY), listed on the Amsterdam Euronext stock exchange, fell 5% on Wednesday having lost 18% of their value over the previous 12 months.

The Amsterdam headquartered company, however, held onto its full-year guidance as it reiterated its view that it will generate earnings before interest, taxes, depreciation, and amortization (EBITDA) worth EUR450 million throughout 2024.

The value of orders in the U.K. & Ireland increased 11% year-on-year, to EUR1.7 billion, as sales in Northern Europe grew 5%, to EUR2 billion, in a shift that saw both segments return to growth compared to a year ago.

In the U.K. & Ireland, the volume of orders made through Just Eat's platform increased 1% following seven consecutive quarters of decline.

Those increases, however, failed to offset an 11% drop in sales in North America to EUR2.34 billion, and a 15% drop in its combined Southern Europe, Australian & New Zealand unit to EUR495 million, as the firm reiterated plans to exit New Zealand in the coming weeks.

Overall, this saw Just Eat's firm wide sales fall by 2%, in what marks the smallest drop in the value of its orders over the previous four quarters. Excluding North America, Just Eat's group sales increased by 4% year-on-year.

Analysts at Deutsche Bank, led by Silvia Cuneo, said the results mark an improvement on Just Eat's performance over the past year. "Improving growth trends should compensate for the lack of forward consensus upgrades as the FY24 guidance has been reiterated," they said.

-Louis Goss

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04-17-24 0543ET

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