Thursday Apr.21, 2022

🚚 Tesla delivers

All lined up and ready to go (Johannes Eisele/AFP via Getty Images)
All lined up and ready to go (Johannes Eisele/AFP via Getty Images)

Hey Snackers,

Too much time spent scrolling Bananagram: a 16-year-old gorilla is so phone-addicted that Chicago’s Lincoln Park Zoo is cutting his screen time. Turns out, it’s not just human teenagers.

Stocks ended yesterday mixed, with the industrials-heavy Dow closing higher and the techy Nasdaq weighed down by Netflix’s subscriber drop.

Tweeter

Tesla shows up OG carmakers by crushing earnings with a delivery record, but China is complicating its future

Taking a break from Twitter... Between tweeting about buying Twitter, posting Shiba Inu memes, and hopping on Tesla's earnings call, Elon is having a busy month. Despite supply struggles and China’s Covid lockdowns, Tesla crushed earnings expectations yesterday.

  • Above and Elon'd: The electric-car leader reported that sales were up 81% from a year ago, while profit more than 7X'd. The stock spiked 5% after hours.
  • Tesla managed to deliver a record 310K cars last quarter, up from 308K the previous quarter. The Model 3 and Model Y (its least pricey models) made up nearly all deliveries.

It goes Elong way... Tesla emerged victorious from "an exceptionally difficult" quarter thanks to #versatility. Its software prowess allowed it to swap hard-to-find chips for ones that were less supply chain-ed. Others weren’t so lucky: while Tesla deliveries were up 70% from the year-ago quarter, OGs like GM and Toyota reported big sales declines because of parts shortages.

  • Showing up: Tesla nearly doubled deliveries last year, to 936K, and recently started shipping cars from its two new Gigafactories in Germany and Texas.
  • Catching up: Tesla’s production numbers are moving closer to being on par with traditional luxe carmakers like Mercedes and BMW. It’s already pulled ahead of Volvo and Subaru.

China’s clouding the picture… for Tesla and for everyone. While some analysts think Tesla could sell 2M cars this year, China’s zero-Covid crackdown is complicating projections. Tesla had to halt production at its key Shanghai factory for weeks because of citywide lockdowns. Yesterday, Elon said “Shanghai’s coming back with a vengeance” (sleeping bags and all). But the plant’s closure is expected to knock 50K cars off this quarter’s output.

Takeout

Grubhub may be sold — again — as the one-time delivery leader falls behind Uber and DoorDash

You’ve hardly touched your Grub… and now it’s getting cold. Dutch food deliverer Just Eat Takeaway says it’s considering a sale of its US unit, Grubhub. It was only last year that Just Eat bought Grubhub for $7.3B, after a boom in pandemic ordering. But the Hub has slowly been crowded out as the delivery rivalries intensified:

  • Lost appetite: Just Eat posted a 5% decrease in orders last quarter in North America.
  • Shrinking slice of the pie: Last month Grubhub delivered only 10% of US online orders, down from nearly 70% in 2016. In that same span, DoorDash boosted its share more than 10X, to 59%, and Uber Eats upped its take 6X, to 30%.

People are still ordering food online… just not on Grubhub. Monthly sales across the online food-delivery biz have increased about 6X since 2018. This year they’re expected to jump 15% from 2021. But well-funded competition and mounting regulatory pressure have made it hard for Grub to stay on top.

  • Dining and dashing: Customers will gladly ditch one app to order a cheaper burrito from another; Grubhub’s ex-CEO said these “promiscuous customers” limit growth.
  • Fee frustration: Early in the pandemic, big markets like NYC capped delivery fees to protect struggling restaurants. Grubhub lost $100M+ from US fee caps in 2020.

It’s hard to overcome the “first-mover disadvantage”… Grubhub dominated US delivery for years before IPO’ing in 2014. But going public first may have worked against it. Although Grubhub posted its first profit in 2018, it sacrificed growth to get there, and now it’s losing money again. Meanwhile, Uber Eats and DD have never turned an annual profit, but they’ve burned through VC cash to take a big bite from Grubhub’s market share.

What else we’re Snackin’

  • Tumble: Netflix’s stock sank 35% — wiping out $50B in market cap — a day after it reported a surprise subscriber loss. Paramount, Disney, and Roku also took hits on fears the stream-fatigue could spread.
  • Soar: United Airlines expects to return to profitability this year as vacay-hungry travelers shell out more $$ to fly. Delta said the same, and it could be a turning point for the airlines in their recovery.
  • Tide: Pantene parent P&G had its best sales in two decades as shoppers paid top dollar for name-brand products. The company said it’s not seeing evidence that inflation has made consumers overly price-conscious.
  • Spigot: Germany plans to stop buying Russian oil by the end of the year, making it the latest EU country to start weaning itself off Russian energy. Moscow’s been funding its war partly from selling oil and gas to Europe.
  • Poke: Novavax put out encouraging early-trial data for its combo Covid-flu vaccine showing it triggered an immune response. The goal is for people to get a single yearly shot that protects against both viruses.

Thursday

  • Weekly jobless claims
  • Earnings expected from AT&T, NextEra, Philip Morris, Charles Schwab, Snap, Blackstone, Progressive, Tractor Supply Co., AutoNation, and American Airlines

Authors of this Snacks own: shares of Roku, Delta, Tesla, AT&T, Snap, Disney, Netflix, GM, and Uber

ID: 2161754

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