Why Just Eat Takeaway.com Stock Fell Today

What happened

Just Eat Takeaway.com (NASDAQ:GRUB) shareholders lost ground to the market on Thursday as the stock fell 13% by 3 p.m. ET compared to a 0.1% increase in the S&P 500. The slump followed the global food delivery specialist's fourth-quarter earnings report, which came up short of some investors' expectations.

So what

Just Eat, which purchased GrubHub last year, announced solid sales trends that nevertheless demonstrated that the business faces a few big challenges as the world looks to transition beyond the pandemic. Revenue jumped 33% for the full 2021 year thanks to a rising volume of orders.

Image source: Getty Images.

Yet its new customer signups slowed compared to pandemic peaks. Just Eat also hasn't yet built a consistently profitable business. Adjusted losses landed at 1.2% of sales, consistent with management's mid-January forecast.

Now what

The company has some major initiatives aimed at lifting itself into profitability. Just Eat is closing its operations in Norway and Portugal, for example, which have been draining resources without delivering much growth. Management sees room to boost delivery fees, too, even as it gains efficiency thanks to rising volumes.

Still, the company is projecting another year of modest losses ahead, albeit at a slightly better rate than shareholders saw in 2021. The food delivery industry is extremely competitive today, with third-party aggregators all fighting to establish enough scale to produce positive returns. Just Eat took a small step in that direction this past year and is aiming for another improvement in the fiscal year ahead.

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Demitri Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool recommends Just Eat Takeaway.com N.V. The Motley Fool has a disclosure policy.