Just Eat raises guidance, but order appetite shrinks

It also announced a shareback buyback programme of up to 150 million euros ($164.34 million) to be completed by the end of the year, which it said would improve earnings per share.

The food delivery sector was among those boosted by the COVID-19 pandemic, but the effect has waned as consumers, faced with surging prices, have cut discretionary spending.

Europe’s biggest meal delivery company expects adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of 275 million euros ($301.6 million) in 2023. It had in January forecast adjusted EBITDA of 225 million euros.

At the same time, its first quarter trading update reported a drop in total orders to 227.8 million, 14% below last year’s level.

The Dutch-listed company said it expected its gross transaction value (GTV) growth to be in a range of -4% to +2% year-on-year in 2023 after a GTV of 6.67 billion euros, down 8% year-on-year, in the first quarter.

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It said it expected free cash flow to turn positive in mid-2024. Just Eat’s cash flow has yet to emerge from the red and since its IPO in 2016, the share price has lost nearly 30% of its original value.

On Wednesday, its share price initially rose only to fall by 4% at 0737 GMT.

Analysts were cautious.

“For us it becomes more and more clear that JET’s financial growth profile (and hence its multiple) depends almost solely on margin expansion (in the absence of top-line growth) and visibility remains low,” J.P Morgan analysts said in a note.