News Column

GrubHub, fresh off IPO, beats profit 2nd-qtr expectations

July 24, 2014

By Jessica Wohl, Chicago Tribune

July 24--GrubHub Inc. reported higher than expected second-quarter revenue on Thursday, though profit at the newly public company came in below analysts' expectations as it spends on hiring and advertising.

Shares of the Chicago-based online food ordering company rose 4.9 percent to $35.17 after jumping more than 10 percent in Thursday morning trading on the New York Stock Exchange. GrubHub shares soared as high as $40.80 during their April 5 debut, after pricing at $26 per share.

GrubHub said its number of "active diners," or people who use the site, grew by 51 percent to 4.19 million compared to last year's second quarter.

The company, which is trying to raise awareness of its service, decided to spend more on advertising in the second quarter after seeing good results from television commercials in the first quarter, Chief Executive Officer Matt Maloney said during a conference call. It is also hiring more engineers, who are interested in joining the company now that it is public, Maloney said.

GrubHub said it is working to beef up its technology staff for efforts to improve its systems behind the scenes and in ways that diners place their orders. For example, the company is investing in mobile technology as more people place their food orders on their mobile phones. Mobile ordering accounted for 48 percent of orders in the second quarter, up from 39 percent a year earlier, Maloney said.

GrubHub reported sales of $60 million and earned $2.7 million, or 3 cents per share, for the quarter that ended on June 30. The four analysts who track the stock were, on average, looking for $54.68 million in sales and a profit of 7 cents per share.

GrubHub said that it expects third-quarter revenue in the range of $55.5 million to $57.5 million. It forecast adjusted earnings, which exclude certain factors, of $13 million to $15 million for the third quarter. Adjusted earnings in the second quarter came in at $16.9 million.

GrubHub's IPO followed the company's merger with New York-based rival Seamless in August 2013.

Tribune reporter Corilyn Shropshire contributed.

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Source: Chicago Tribune (IL)

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