DoorDash (NASDAQ:DASH) has recently formed a strategic partnership with Lowe’s Companies (NYSE:LOW), aiming to expand its presence in the local commerce platform.
This collaboration enables DASH to venture into the home improvement category, granting nationwide access to over 1,700 Lowe’s stores for on-demand delivery.
Through the partnership, customers can seamlessly purchase Lowe’s products directly via the DoorDash app, enhancing their ability to shop for everyday items with same-day delivery. This initiative enriches DoorDash’s diverse selection offering, ensuring that over 99% of its monthly consumers in the United States have access to various retailers on the platform.
Participating Lowe’s stores will also be integrated into DashPass, DoorDash’s membership program, providing members with benefits such as a $0 delivery fee and reduced service fee on eligible orders.
DoorDash’s Expansive Portfolio Drives Growth
DoorDash’s shares have seen a 39.8% increase year-to-date, outperforming the Zacks Computer & Technology sector’s rise of 11.4%. This upward trend can be attributed to DoorDash’s dedication to expanding its offerings and providing convenient access to a wide range of products and services for consumers.
The company’s growing clientele is noteworthy. In addition to Lowe’s, DoorDash recently announced a partnership with Alphabet (NASDAQ:GOOGL).
In March, DoorDash collaborated with Alphabet’s drone delivery technology arm, Wing, to introduce a drone delivery partnership in the United States, starting in Cristianburg, VA. This collaboration allows select local customers to have Wendy’s meals delivered via drone through the DoorDash marketplace.
These initiatives are expected to bolster DoorDash’s total orders, which saw a 23% year-over-year increase, amounting to $574 million in the fourth quarter of 2023. Marketplace Gross Order Value (GOV) also experienced a 22% year-over-year increase, reaching $17.6 billion.
The expansion of DoorDash’s partner base has been a significant catalyst for growth. In January, the company welcomed new retail partners like Camping World, Golf Galaxy, JD Sports, Finish Line, and The Vitamin Shoppe, diversifying its marketplace to include over 100,000 non-restaurant stores. This expansion offers consumers on-demand delivery for a diverse array of products catering to active and wellness lifestyles.
Moreover, DoorDash’s recent extension of SNAP/EBT payment options to over a dozen new grocers, along with offering two free months of DashPass to new customers who uploaded their SNAP/EBT cards, underscores the company’s commitment to providing inclusive and convenient services to all.
DoorDash’s robust portfolio and partner base continue to fuel its growth prospects, driving top-line growth. For the first quarter of 2024, DoorDash expects Marketplace GOV in the range of $18.5-$18.9 billion.
The Zacks Consensus Estimate for first-quarter 2024 revenues is pegged at $2.45 billion, indicating a 20.52% year-over-year growth. However, the Zacks Consensus Estimate for earnings is expected to decline by 7 cents per share, down by a couple of pennies in the past 30 days.
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