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: DoorDash projects decline in European acquisition’s delivery business, stock falls

DoorDash Inc. shares fell Wednesday after the company closed the acquisition of a European food-delivery service and executives updated their guidance to forecast a sequential sales decline for their new property.

In a filing with the Securities and Exchange Commission made public Wednesday, DoorDash
DASH,
-6.45%

executives updated their second-quarter forecast to include Wolt, which the company acquired for more than $8 billion in stock. DoorDash increased its second-quarter forecast for gross-order volume — which reflects the total amount of delivery orders on its platform — as a result of Wolt’s inclusion, but guided for volume on Wolt’s platform to decline from the first quarter.

DoorDash executives now expect second-quarter volume of $12.8 billion to $13 billion, after previously stating $12.1 billion to $12.5 billion. But most of the gain stemmed from increasing optimism in DoorDash’s business, not Wolt’s: Executives increased the forecast for DoorDash’s standalone business to $12.5 billion to $12.7 billion from the previous forecast, while projecting $800 million to $850 million in order volume from Wolt, only part of which will count on DoorDash’s books for this quarter.

Wolt reported gross-order volume of $888 million in the first quarter, suggesting a sequential decline and year-over-year growth of 30% or less. Executives also guided for an adjusted-Ebitda loss of $70 million to $80 million for Wolt, while maintaining overall guidance for adjusted-Ebitda profit of up to $100 million.

When announcing the acquisition last November, DoorDash executives noted growth rates of more than 100% for Wolt.

“The business has grown to $2.5B of annualized gross order value. It’s growing triple-digits. It’s done so while also growing its bottom line at the same time,” DoorDash Chief Executive Tony Xu noted in a conference call after the deal was announced.

Reuters reported that Wolt Chief Executive Miki Kuusi said in an email exchange with that news organization that “the macroeconomic and geopolitical situation in Europe has changed significantly in the past months.”

“With inflation, increasing gas prices and general uncertainty, there is some pressure to raise prices. We continue to monitor the situation very closely,” he wrote.

DoorDash spokesman Ali Musa confirmed Kuusi’s exchange with Reuters, and reiterated that DoorDash executives “revised up our standalone guidance for Q2 thanks to stronger order frequency and higher average order prices.” In a later email, Musa pointed out that the second quarter is “typically soft due to seasonality,” and that Wolt’s guidance calls for roughly flat volume quarter-over-quarter when judged in euros instead of dollars.

DoorDash stock fell as much as 9.4% Wednesday before closing with a 6.5% decline at $71.95. Shares have lost 51.7% so far this year, as the S&P 500 index
SPX,
-0.75%

has dropped 13.3%.

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