Deliveroo has slashed its full-year sales forecast as “increased consumer headwinds” slam the brakes on growth.
The online food delivery app said it now expects to deliver 4-12% growth in gross transaction value (GTV) this year, compared to its previous forecast of 15-25%.
Deliveroo maintained its previous EBITDA margin guidance of between -1.5% and -1.8% as a percentage of GTV.
The business said it was making the hefty downgrades as a result of “a more cautious economic outlook” and a marked slowdown in sales during the second quarter of its current financial year.
Group GTV growth stalled to just 2% in constant currencies during the three-month period, compared to 12% in its first quarter.
Deliveroo said although order numbers grew 3% during the second quarter, the value per order “reduced slightly” year on year. It said basket sizes were “elevated” last year, at a time when many of its customers were still living under lockdown measures.
In constant currencies, GTV rose 4% in the UK and Ireland during the quarter and 1% in Deliveroo’s international markets. GTV hit £3.56bn – a 7% uplift year on year – in its first half.
Deliveroo was one of the beneficiaries of the coronavirus crisis as retailers including Marks & Spencer, Waitrose, Aldi, WHSmith and Majestic Wine flocked to join its platform. However, sales slowed as stores reopened and consumers returned to more normal shopping habits. Aldi has pulled out of its Deliveroo deal, focusing instead on its own click-and-collect proposition.
The cost-of-living crisis is set to have a further impact on Deliveroo’s business, with hard-pressed consumers likely to rein in spending at restaurants as they face rapidly increasing energy bills.
Deliveroo said: “The company is maintaining its adjusted EBITDA margin guidance and Deliveroo’s balance sheet remains strong. Management is confident in the company’s ability to adapt financially to a rapidly changing macroeconomic environment, through gross margin improvements, more efficient marketing expenditure and tight cost control.”
The business will unveil its half-year results on August 10.
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