After Grubhub posted fourth-quarter results that beat the street, its stock jumped more than 23 percent on Thursday (Feb. 8), CNBC reported.
While analysts polled by Reuters had estimated fourth-quarter earnings of $0.31 per share on $201.7 million in revenue, Grubhub surpassed those predictions with earnings of $0.37 a share on revenue of $205.1 million. The company also beat active diners estimates: It had 14.46 million active diners, which was above the 11.53 million predicted by analysts polled by FactSet.
The news comes as Yum! Brands is buying a 3 percent ownership stake in Grubhub and is teaming up with the company to provide delivery from two of its brands. In the future, Grubhub said it will provide delivery and online ordering for KFC and Taco Bell.
“The partnership with Yum!, which we announced this morning, will accelerate the expansion of our delivery network and amplify our diner acquisition efforts, raising consumer awareness of online ordering and driving more volume for all restaurants across our platform,” Grubhub CEO Matt Maloney told CNBC in a statement.
The partnership comes as fast food chains have increased their appetite for delivery: McDonald’s, for example, has rolled out delivery to 5,000 of its approximately 14,000 U.S. stores. And customers typically spend more when they order delivery, according to McDonald’s.
Grubhub has been in expansion mode. In 2017, it gobbled up at least three different food delivery competitors: Boston-based Foodler, Groupon’s OrderUp and, most recently, Yelp’s Eat24. That deal closed on Oct. 10 and rounded out the company’s acquisition plans just in time for the end of Q2. Grubhub paid $288 million for the company — in cash — which Bloomberg noted was twice what Yelp paid when it acquired the smaller food delivery company in 2015.
All told, Grubhub integrates with roughly 75,000 restaurants.
