Delivery Hero CEO Niklas Östberg speaking at the Noah tech conference in Berlin on June 13, 2019.
Krisztian Bocsi | Bloomberg via Getty Images
The boss of European food delivery firm Delivery Hero has apologized to investors after shares of the company plummeted more than 30% on disappointing earnings guidance for 2022.
“Today our share price dropped 30%! I’m truly sorry for all shareholders! I’m in your boat,” Niklas Ostberg, Delivery Hero’s CEO, said Thursday via Twitter.
Despite reporting a jump in fourth-quarter sales, Delivery Hero’s shareholders were spooked Thursday after the company announced cautious estimates for the coming year.
Delivery Hero said it expects overall sales volume of 44 billion euros to 45 billion euros ($50 billion to $51 billion) in 2022, falling short of analysts’ expectations. The company also forecast a negative margin on core profit of between 1% and 1.2%.
Nevertheless, Ostberg vowed to continue with Delivery Hero’s current business plan, with the promise that it would eventually work out.
“We will not change our strategy because of the drop but we will work even harder to provide our investment strategy is going to pay off,” he said.
Delivery Hero shares plunged more than 30% on Thursday, their worst drop on record. On Friday, the stock fell a further 12% after analysts at JPMorgan and Barclays cut their price targets for the name. The company has lost roughly $7.4 billion in market value since Wednesday’s close.
“There’s nothing that halts a growth story in its tracks quite like an outlook which doesn’t promise the kind of growth that investors had been banking on,” Danni Hewson, financial analyst at AJ Bell, told CNBC on Thursday.
Delivery Hero was one of the darlings of the coronavirus pandemic, with shares surging in 2020 as investors flocked to beneficiaries of “stay at home” trends such as online food ordering and videoconference tools.
Such stocks have seen a pullback lately, however, as Covid-19 restrictions are being wound back and central banks begin to talk of hiking interest rates and tapering stimulus measures to tackle rising inflation.
Delivery Hero has lost roughly two-thirds of its value in the last 12 months, while Deliveroo and Just Eat Takeaway.com have failed around 50% and 60% respectively.
In Delivery Hero’s case, investors are concerned the company is taking longer than rivals such as DoorDash and Uber to attain adjusted profitability.
Food delivery businesses are looking to consolidate to stay ahead and fend off emerging challengers, including rapid grocery delivery apps like Getir and Gorillas. Delivery Hero recently agreed to acquire a majority stake in Spanish rival Glovo, while DoorDash plans to buy Finnish delivery firm Wolt.