Grubhub saw its shares increase as much as 10 percent after it was revealed that its CEO purchased almost $1 million of company stock.
The information was discovered in a filing with the U.S. Securities & Exchange Commission, showing that Chief Executive Officer Matthew Maloney acquired the stock. Shares were also likely helped by positive comments from one of its partners — Yum! Brands Inc., the Louisville, Kentucky-based operator of KFC and Taco Bell.
“We are excited about our partnership with Grubhub,” Yum CEO Greg Creed said in a conference call, according to Bloomberg. “We now have 2,200 KFCs offering delivery and 3,200 restaurants available for click-and-collect on the Grubhub marketplace.”
The rise in shares also comes after Grubhub reported revenue for the first quarter of 2019 of about $323.8 million, up 39 percent year over year, beating analyst expectations of $322.8 million. The online food delivery service also reported gross food sales of $1.5 billion, a 21 percent year-over-year increase. Active diners increased 28 percent compared to the same period last year, to 19.3 million. Net income was $6.9 million, up 78 percent from the first quarter of 2018, while adjusted earnings of 30 cents per share beat analyst expectations of 25 cents per share.
“The strong momentum in our business throughout 2018 continued in the first quarter of 2019. The dramatic increase in the scale and diversity of our diner base, combined with the consistent diner value outlined in the supplemental disclosure, sets us up for a great future,” said Grubhub president and CFO Adam DeWitt. “We anticipate our typical seasonality in the second and third quarters and remain on track for both our topline and bottom-line objectives for the full year 2019.”
This is no doubt good news for the company after a report in March from KeyBanc Capital Markets said the food delivery service was struggling in its high-competition environment and failing to keep pace with players like Uber Eats and DoorDash. “Diner retention, initial diner spend and peak diner spend all appear to be deteriorating,” wrote the analysts.