Just Eat Takeaway.com Boosts Profit Forecasts and Returns to Growth in Key Markets

Just Eat hikes profit and cash flow forecasts, shares jump

Just Eat Takeaway.com, the heavyweight of meal delivery in Europe, is not only back in the game but also set to outperform its previous expectations. The company has raised its core profit and cash flow forecasts, signaling a robust recovery in Northern Europe, Britain, and Ireland. Investors greeted this news with enthusiasm, driving the company’s shares up by 3%.

Meal delivery companies are navigating a path towards consistent profitability after experiencing a surge in demand during the pandemic. While they continue to invest in marketing to retain customers, they are also striving for financial stability.

Just Eat’s approach to marketing has been unconventional. The company has enlisted celebrities such as Christina Aguilera, Katy Perry, and rapper Snoop Doggy Dogg for its advertising campaigns. CEO Jitse Groen explained that this strategy enhances “top-of-mind awareness” without an immediate translation into orders.

The company now expects adjusted core earnings of approximately €310 million ($328 million) for 2023, an increase from its earlier guidance of about €275 million. This upward revision reflects Just Eat’s solid operational performance and market presence.

Jitse Groen, CEO of Just Eat Takeaway.com, discussed the company’s commitment to enhancing algorithms and IT systems, stating that there are “a lot of improvements” in the pipeline, although specific details were not provided.

The third quarter of 2023 marked a turning point for the company, with a 6% growth in Northern European Gross Transaction Value (GTV) and a 4% increase in Britain and Ireland. In contrast, North America reported an 11% decline.

This decline in North America was attributed to a slower recovery in Canada and the strength of the U.S. dollar. However, Groen expressed optimism about the region’s future performance, driven by a strategic partnership with Amazon, announced in 2022.

The company is actively exploring options for its U.S. unit Grubhub, including the possibility of a partial or full sale.

Just Eat Takeaway.com‘s financial resilience is underscored by its expectation to achieve free cash flow break-even in the second half of 2023, which is earlier than the previous mid-2024 goal. The company also anticipates GTV to decrease by approximately 4% this year, aligning with the lower end of its previous forecast range.

The upward revision in profit forecasts and the positive trajectory in key markets demonstrate that Just Eat Takeaway.com is successfully navigating the ever-evolving meal delivery landscape, aiming to deliver not only meals but also stable and sustainable profitability.

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