By Juveria Tabassum
(Reuters) – Instacart on Tuesday forecast current-quarter key metrics below estimates, in signs that spending on online grocery and food deliveries on its platform could temper in the holiday season.
Competition has picked up in the online delivery space, building on a pandemic boom that allowed firms such as Instacart, UberEats and DoorDash to diversify their product offerings and raise transaction fees.
However, spending has cooled as household budgets buckle under pressure from higher prices.
The delivery firm expects fourth-quarter GTV — a key metric that shows the value of products sold — between $8.50 billion and $8.65 billion, below estimates of $10.20 billion, as per data compiled by LSEG.
Target for adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of between $230 million and $240 million was also below estimates.
The forecast reflects tougher year-ago comparisons and an impact from a cybersecurity breach at grocery store operator Ahold Delhaize early in November, Instacart said.
In contrast, rival Doordash forecast fourth-quarter core profit above estimates.
“Given the momentum of the business, paired with how well Instacart performed last year during the holiday season, it is surprising to see a more conservative forecast,” said eMarketer senior analyst Blake Droesch.
Shares of the company, also known as Maplebear, which have doubled so far this year, were down 4% in after-hours trading.
Still, Instacart swung to a profit in the reported quarter and topped estimates on key metrics, with orders growing 10% year-over-year.
Instacart has broadened its retail tie-ups, adding companies such as Party City to its platform, while its partnership with UberEats brought restaurants on board for food delivery.
The company has also worked on integrating digital coupons from retailers and offering low-cost delivery options to attract cost-conscious consumers.
“These developments are a clear indication that Instacart has big ambitions to go from a grocery delivery service to an all-around retail technology giant,” Droesch added.
Third-quarter adjusted EBITDA of $227 million topped estimates of $212.08 million, while GTV rose about 11% to $8.30 billion, beating estimates of $8.19 billion.
(Reporting by Juveria Tabassum; editing by Alan Barona)
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