Deliveroo shares drop as firm warns of slower consumer spending
Deliveroo (ROO.L) boosted sales in the first three months of the year but warned that consumer spending could slow for the remainder of the year.
The warning sent the food delivery platform's share price plummeting, with the stock losing over 3% in the London Stock Exchange (LSEG.L) in midday trading.
More customers placed orders during the first three months of the year with Deliveroo experiencing an 18% rise in orders to 82.4 million, although the amount spent per order fell 7% to £21.70 ($28.23) on average.
Deliveroo said that its gross transaction value (GTV), the money value of all food orders on its platform, rose by 11% on the year in the first quarter.
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In the UK and Ireland GTV was up 12% to £956m, with orders up 20% to 40.7 million but, again, the average spend per order was down 7% to £23.50.
"For a growth company like Deliveroo, this (quarterly GTV growth) is not a stellar figure. Actually, it is a warning that the rest of the year is going to be quite volatile," said AJ Bell analyst Danni Hewson.
Britain and Ireland account for nearly 54% of the company's overall GTV.
Deliveroo repeated the guidance that it gave last month, in expecting GTV to grow by between 15% and 25% this year
Founder and chief executive Will Shu said: “We expanded existing relationships in grocery with Waitrose and Carrefour (CA.PA), widened our offer of 12-months free Plus subscription for Amazon Prime members to include France and Italy, and launched a new pilot with WHSmith (SMWH.L) in the UK.
Read more: Deliveroo shares rise as orders boost growth
“Consumer behaviour may moderate during the year, and this is reflected in our guidance.
“We remain confident in our ability to adapt financially to any further changes in the macroeconomic environment.
“We continue to be excited about the opportunity ahead and our ability to capitalise on it.”