Instacart layoffs hit 250 workers despite core profits that exceeded expectations

Instacart forecast, on Tuesday, its first-quarter gross transaction value (GTV) and core profit above estimates due to an uptick in grocery orders, and said it plans to cut 250 jobs, or 7% of its workforce, to focus on “promising” initiatives.

Shares of Instacart reversed course to be down about 5% after the bell following Instacart’s lower-than-expected fourth-quarter revenue on slowing advertisement business.

As of June 30, Instacart had 3,486 employees, according to a regulatory filing.

“We are seeing [some weakness among advertisers] in pockets, but it is not widespread,” said CEO Fidji Simo on a post-earnings call.

Ad and other revenues increased 7% in the fourth quarter, compared with a 19% growth in the previous quarter.

“Advertising business has slowed down,” CFRA Research’s Arun Sundaram said, adding that this would cause a bit of concern because it was historically a very fast growing and high-margin business for the company.

Total revenue rose 6% to $803 million, falling short of analysts’ expectations of $804.2 million.

Transaction revenue growth slowed sequentially to 6%, as Instacart offered more incentives and promotions to attract customers, especially during the holiday season, amid stiff competition from rivals such as DoorDash, UberEats, Amazon.com, and Walmart.

Total orders rose 5% to 70.1 million in the reported quarter as the grocery-delivery company also saw growth among its newer customer base.

The company expects current-quarter GTV—a key industry metric that shows the value of products sold based on prices shown on Instacart—to come between $8 billion and $8.2 billion, compared with analysts’ estimates of $7.92 billion.

It sees adjusted EBITDA between $150 million and $160 million, compared with analysts’ estimates of $151.6 million, according to LSEG data.

The firm said it authorized an additional $500-million-share repurchase program and expects to generate positive operating cash flow this year.

—Reporting by Granth Vanaik in Bengaluru; editing by Shinjini Ganguli and Sherry Jacob-Phillips

https://www.fastcompany.com/91029219/instacart-layoffs-hit-250-workers-despite-core-profits-that-exceeded-expectations?partner=rss&utm_source=rss&utm_medium=feed&utm_campaign=rss+fastcompany&utm_content=rss

Létrehozva 1y | 2024. febr. 14. 17:50:09


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