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Instacart forecasts upbeat current-quarter, taps Uber veteran as CFO

: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 per cent 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 per cent to $820 million, helped by a 9 per cent rise in total orders to 72.8 million.

Instacart shares were down 1 per cent at $37.09

Source: Reuters

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