Instacart shares rally on a forecast boosted by restaurant orders

By Bill Peters

Delivery company trying to partner with bigger retailers and banking on more restaurant orders through its app

Shares of Maplebear Inc. - the online grocery-delivery company better known as Instacart - jumped in extended trading Tuesday after the company forecast a key demand metric that was above Wall Street's expectations, as it looks to partner with bigger retailers and banks on more restaurant orders through its app.

Instacart (CART) forecast third-quarter gross transaction value - or the value of products sold on its platform - of $8.1 billion to $8.25 billion, a figure that the company said factored in a "modest growth contribution from restaurant orders." The midpoint of that forecast was a bit above the $8.11 billion expected by Wall Street analysts.

The company reported second-quarter net income of $61 million, or 20 cents a share. Revenue climbed 15% year over year to $823 million. Gross transaction value rose 10% to $8.19 billion.

Those results were above expectations. Analysts polled by FactSet expected Instacart to earn 13 cents a share during the second quarter on sales of $806 million, and expected gross transaction value of $8.12 billion.

Shares rose 6.8% after hours on Tuesday. The stock is up 33.9% so far this year.

The company reported the results as it invests in longer-term growth, in anticipation of wider adoption of online shopping and delivery down the road. Along with grocery chains, its delivery services have expanded to stores like Home Depot Inc. (HD) and Sally Beauty Holdings Inc. (SBH)

Meanwhile, its partnership with Uber Technologies Inc.'s Uber Eats allows it to offer takeout orders via scores of restaurants on top of grocery runs.

"Early data affirms our belief that restaurants can be incremental to grocery by attracting new customers to our ecosystem andincreasing order frequency for existing ones, especially Instacart+ members," the company said in its letter to shareholders Tuesday. "We're also seeing higher average basket sizes for restaurant orders than those on other platforms."

Instacart reported the results as Wall Street worries about a more cautious consumer, as prices at grocery stores and restaurants remain high. However, shares of Uber (UBER), one of the company's gig-economy peers, rallied on Tuesday following the ride-hailing platform's own quarterly results.

"While our consumers tend to be higher income, we're not seeing any softness or trading down across any income cohort," Uber Chief Executive Dara Khosrowshahi said during the company's earnings call.

-Bill Peters

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08-06-24 2011ET

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