Instacart topped third-quarter earnings and issued upbeat guidance under new CEO Chris Rogers
The grocery delivery platform‘s stock was flat in Monday trading.
Here’s how the company did versus LSEG estimates:
- Earnings per share: 51 cents vs. 49 cents expected
- Revenue: $939 million vs. $934 million expected
Revenue rose 10% from $852 million in the year-ago period. Gross transaction value, which tracks the value of goods sold, climbed 10% to $9.17 billion from $8.3 billion last year and surpassed a $9.11 billion estimate from FactSet.
In his first letter to shareholders as CEO, Rogers said Instacart is focused on affordability and boosting its enterprise solutions. He referred to the company’s enterprise platform as one of the “most underappreciated parts” of the business during an earnings call with analysts.
“We’re deepening customer and retailer relationships, expanding our ads ecosystem, and launching innovative AI-powered tools across all aspects of our business — all while driving profitable growth,” he wrote.
For the current quarter, the grocery delivery platform forecast gross transaction value to range between $9.45 billion and $9.6 billion, reflecting 9% to 11% year-over-year growth. The midpoint surpassed the $9.48 billion forecast by FactSet. The company expects adjusted earnings before interest, taxes, depreciation and amortization of $285 million to $295 million.
Instacart said the guidance reflects a robust October and enterprise partnership growth, but also accounts for issues with the Supplemental Nutrition Assistance Program, or SNAP, as the government shutdown has dragged on.
Orders during the period grew 14% from a year ago to 83.4 million and topped the 83 million expected by StreetAccount. Instacart said average order value fell 4% due to restaurant orders and waived delivery fees on lower basket orders for Instacart+ members.
Instacart is facing an increasingly competitive landscape, with market share loss a concern as more companies hop into the grocery delivery space.
This summer, e-commerce giant Amazon launchedsame-day fresh food delivery and said it plans to reach at least 2,300 markets by year-end. Food delivery leader Doordash expanded its partnership with Kroger in September.
Rogers told analysts on Monday that the company isn’t concerned about retailers such as Kroger teaming up with other partners. He referred to last week’s news that Kroger will expand its agreement with Instacart as a “strong vote of confidence in the value that we bring.”
Net income rose to $144 million, or 51 cents per share, from $118 million, or 42 cents in the year-ago period.
The company said it is using artificial intelligence tools to expand features for grocers and shoppers and boost its advertising offering. Earlier this month, Instacart launched a suite of new AI solutions for grocers, including a shopping assistant that offers product recommendations.
The company also upped its share buyback plan by $1.5 billion and said it plans to undertake an accelerated $250 million share repurchase program.
Correction: Instacart reported earnings of 51 cents per share. An earlier version mischaracterized the figure. Instacart expects adjusted EBITDA of $285 million to $295 million for the current quarter. An earlier version mischaracterized the figure. Instacart’s average order value fell 4%. An earlier version mischaracterized the measure.
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