Delivery Hero shares rise on better-than-anticipated fourth-quarter growth

Investing.com - Delivery Hero (ETR: DHER) posted better-than-anticipated fourth-quarter growth in gross merchandise value, fueled in part by strength at its grocery and warehouse delivery business and bigger basket sizes.

Shares in the group, which have slumped sharply from a high notched in 2021 due to normalizing post-pandemic demand, jumped by more than 6% in early European trading on Thursday.

Gross merchandise value -- a metric tracking the total value of transactions -- increased by 8.2% versus the year-ago period to 12.81 billion euros thanks to strong order demand and expanding basket sizes on the platform. Analysts had anticipated 12.31 billion euros, according to a company-provided poll.

Total segment revenue growth also came in at 23% year-over-year, due to more sales at the German firm's Dmarts grocery and warehouse delivery unit, more platform monetization and a push to augment its advertising technology offering.

Full-year adjusted earnings before interest, taxes, depreciation and amortization was about 750 million euros. Analysts at Barclays (LON:BARC) had been anticipating a figure in the low-end of Delivery Hero's prior guidance range of 725 million euros to 775 million euros.

For the 2025 fiscal year, Delivery Hero sees gross merchandise value rising by 8% to 10% annually, and adjusted core income of 975 million euros to 1.025 billion euros.

"Overall decent [results] in [the] context of recent share price performance," the Barclays analysts said in a note to clients.

Delivery Hero noted that its operations in Saudi Arabia in particular generated solid gross merchandise value (GMV) growth and enhanced its profitability during the quarter. The Barclays analysts called this development "reassuring," adding that its market share is holding up against other rivals in the country. Quarterly GMV from the Middle East and Northern Africa region, its second-largest market, came in at 3.7 billion euros.

Using funds raised from the initial public offering in Dubai of its Talabat subsidiary, Delivery Hero added that it plans to repurchase roughly 1 billion euros of convertible bonds. Analysts at Morgan Stanley (NYSE: MS) flagged that Talabat's strong quarterly returns, which were released earlier on Thursday, also helped drive Delivery Hero's earnings.

You May Also Be Interested In

• Is the global equity rally broadening? UBS weighs in
• BofA maintains underperform ratings on six BDC stocks
• Morgan Stanley course-corrects their semiconductor equipment outlook on demand