On April 28th, Grubhub Inc. (GRUB) posted first quarter results for the period ending March 31st.  The company is due to be acquired by Just Eat takeaway.com. For the period, the company lost $75.5 million on revenues of $550.6 million representing a negative EPS of $(0.81).  For the corresponding first quarter of fiscal 2020, Grubhub lost $33.4 million on revenues of $362.9 million with a negative EPS of $(0.36).

The company claimed 32.9 million diners with gross food sales of $2.6 billion.  The higher revenue was attributed to a 28 percent increase in the number of active diners and a 62 percent increase in gross food sales value. 

In commenting on the quarter, Adam DeWitt, President and CFO stated, "we saw strength across all of our markets during the first quarter with the highest growth coming in places with a heavy existing competitive presence” DeWitt added "order growth accelerated in the high single digits compared to the fourth quarter of 2020 even when normalizing for the initial COVID-related deceleration in the second half of March 2020.  We believe our robust hybrid marketplace model is well positioned as we transition to a post-COVID environment".

GRUB posted total assets of $2.36 billion of which $1.54 billion comprised intangible assets.  The company carries long-term debt and operating lease liabilities of $594 million. The Company has traded over a 52-week range of $43.26 to $85.53 with a 50-day moving average $66.55. Stock closed at $70.67 on Wednesday 28th before release of financials but closed at $67.51 on Thursday 29th.

For the trailing twelve months, the company has generated a -3.5 percent return on assets and       -14.0 percent on equity.  The operating margin was -6.9 percent and the profit margin -9.9 percent. Effective April 15th, 14.7 percent of the float of $76.4 million was short. 

During the COVID shutdown period, food delivery services expanded with a proportional increase in revenue but GRUB posted an increased loss. Profit margin declined from -9.1 percent in Q1 2020 to -13.6 percent in Q1 2021. The rate of loss is evidently increasing in proportion to volume of delivery. Going forward, as restaurant dining becomes widely acceptable, food delivery services will be hard pressed to establish profitability.