Delivery Hero shares slip after group fails to provide 2023 sales outlook

By Scott Kanowsky 

Investing.com -- Shares in Delivery Hero AG (ETR:DHER) fell sharply on Thursday after the online food delivery business did not provide key sales guidance in its latest earnings, fueling analysts' concerns that pressure from an inflation-linked slowdown in customer spending will go on in 2023.

The Germany-based business also reported gross merchandise value - a key sales metric often used by e-commerce companies - of €11.35 billion (€1 = $1.0758) in the fourth quarter, well below Bloomberg consensus estimates of €12.03B despite year-on-year growth of 8.8% in reported currency.

Total segment revenue during the period of €2.53B missed an anticipated figure of €2.84B as well.

Analysts at RBC noted that the market did not receive guidance for 2023 gross merchandise value from Delivery Hero, even though the outlook was widely expected. They added that GMV of €44.6B in the 2022 financial year was also slightly under the bottom end of the company's prior guidance range. Delivery Hero previously said in November that the figure would be at the lower end of the €44.7B to €46.9B band.

Rivals Deliveroo Holdings PLC (LON:ROO) and Just Eat Takeaway (AS:TKWY) unveiled similarly less-than-expected returns in the fourth quarter, in a sign that meal deliverers are feeling the impact of consumers reining in expenditures to deal with recently elevated living costs.

However, Delivery Hero did post positive adjusted core income in the final quarter, which it said was a reflection of its "consistent focus" on profitability.

“Last year, the entire industry was faced with several challenges and we worked hard to come out of it as winners," said Chief Financial Officer Emmanuel Thomassin in a statement, adding that the company plans to reach free cash flow break-even in the second half of 2023.