Meituan Tumbles on Warning of Slower Growth as Consumption Wanes

(Bloomberg) -- Meituan shares tumbled the most in more than a year after the Chinese company warned that growth in its main meal delivery business would slow this quarter and spending on promotions rise.

Chief Financial Officer Chen Shaohui expects diners to take advantage of atypically warm weather to dine out, rather than order in. That prediction, based also in part on a difficult comparison with a strong late-2022 market, came after the company reported its third straight quarterly profit off slightly better than-expected revenue.

Meituan’s US-traded shares fell as much as 11% in New York to $24.73. Along with tech peers Alibaba Group Holding Ltd and Tencent Holdings Ltd, Meituan has wrestled with a weak rebound in Chinese consumption after three years of strict Covid controls.

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Mixed official data from last month showed an expansion in Chinese retail sales, but turmoil in the property market has forced Beijing to roll out sweeping measures to shore up the industry’s cash crunch.