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 fell as much as 6% in extended trading after Instacart […]
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Instacart forecasts upbeat current-quarter, taps Uber veteran as CFO
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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 fell as much as 6% in extended trading after Instacart also said CFO Nick Giovanni would be succeeded effective immediately by Emily Reuter, a former Uber executive.
Reuter previously served as CFO of Uber’s mobility division and also as the head of corporate finance at the ride-share company, where she spent nearly a decade.
Earlier this year, Instacart saw the departure of its chief operating officer, technology head, and chief architect.
“High executive turnover is not a good look for a company trying to accelerate growth,” said CFRA Research’s Arun Sundaram.
With Instacart’s pandemic-driven boom now slowing, it has been selling advertisement spaces and forging newer partnerships with retailers to get more consumers.
On Tuesday, it announced a partnership with Uber Eats for restaurant delivery services, challenging rival DoorDash’s dominance.
“We have a lot of incremental audiences that Uber does not have … we are going to be aggressively wanting to convert these customers into restaurant customers,” said CEO Fidji Simo on an post-earnings call.
Instacart expects current-quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) between $180 million and $190 million, versus 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.
Instacart said second-quarter GTV growth is lower than first-quarter as it does not expect to see benefits from inclement weather conditions seen in the U.S. earlier in the year.
Its total revenues rose by a better-than-expected 8% to $820 million, helped by a 9% rise in total orders to 72.8 million.
Instacart shares were down 1% at $37.09
(Reporting by Granth Vanaik in Bengaluru; Editing by Tasim Zahid)