Just Eat has been exceeding expectations in its recent performance, with a surge in its share price and a €150m share buyback announcement following better-than-expected first-half results. The company saw a significant increase in adjusted EBITDA, largely attributed to cost-cutting measures and a decrease in order fulfillment expenses. However, analysts have raised concerns about the potential long-term implications of these strategies, warning that deep cuts could impact the company’s revenue growth.
In regions like Southern Europe and Australia, Just Eat experienced revenue declines and pretax losses, highlighting the challenges of operating in highly competitive markets. Despite efforts to improve cost efficiency and optimize marketing spend, the company’s total orders and gross transaction value also decreased. Restricting investments and focusing on cost reduction have helped improve performance in some areas, but analysts caution that sustained growth may require additional investment.
The company’s decision to sell its American arm, Grub Hub, reflects the challenges of competing in the North American market, where intense competition has eroded market share. Just Eat’s focus on its more profitable businesses in Germany, the Netherlands, and the UK may lead to further divestments in struggling regions. In the UK and Ireland, a shift to an in-house delivery platform has driven significant cost savings and improved adjusted EBITDA, despite a drop in orders.
By streamlining its operations and phasing out partnerships with external delivery services, Just Eat aims to enhance its cost efficiency and profitability. However, the company’s heavy reliance on Northern Europe for a significant portion of its orders poses a potential risk if other regions fail to improve their performance. As Just Eat continues to prioritize its profitable segments and cost-optimizing strategies, the future challenges and opportunities for the company remain uncertain.
