INSTACART FORECASTS UPBEAT CURRENT-QUARTER, TAPS UBER VETERAN AS CFO

By Granth Vanaik

(Reuters) -Instacart forecast its second-quarter gross transaction value (GTV) and core profit above estimates on Wednesday, helped by a surge in grocery orders as well as higher fees for the advertisements it showcases on its grocery delivery platform.

Shares of the company, which have risen nearly 60% this year, were down about 3% in extended trading after Instacart also said CFO Nick Giovanni would be succeeded by former Uber executive Emily Reuter, effective immediately.

"Instacart has now seen a few executives leave the company this year," said CFRA Research's Arun Sundaram. "High executive turnover is not a good look for a company trying to accelerate growth."

Earlier this year, Instacart saw the departure of its chief operating officer, technology head, and chief architect. At the same time, the company also announced plans to cut 250 roles from its workforce.

With Instacart's pandemic-driven boom now relatively stabilizing, it has been relying more on selling advertisement spaces, while forging newer partnerships with retailers to attract more customers to its platform.

On Tuesday, it announced a partnership with Uber Eats for restaurant delivery services, challenging rival DoorDash's dominance. Analysts expect the move will bolster Instacart's platform engagement.

The company now expects current-quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) between $180 million and $190 million, midpoint of which is above estimates of about $168.8 million, according to LSEG data.

It also sees second-quarter GTV, a key metric showing value of products sold based on prices shown on Instacart, to grow between $8 billion and $8.2 billion, compared with expectations of $8.03 billion.

Some viewed the company's forecast as conservative.

The biggest disappointment in the print was the fact that the company's guidance showed no growth, said Art Hogan, chief market strategist at B. Riley Wealth.

Instacart's total revenues rose by a better-than-expected 8% to $820 million in the quarter ending March 31, helped by a 9% rise in total orders to 72.8 million.

(Reporting by Granth Vanaik in Bengaluru; Editing by Tasim Zahid)

2024-05-08T21:49:54Z dg43tfdfdgfd