(Reuters) -Instacart forecast third-quarter gross transaction value above Wall Street estimates on Thursday, betting on resilient demand amid efforts to offer cheaper groceries through its platform, sending its shares up 9% in extended trading.
The company, also known as Maplebear, has doubled down on its push to match in-store prices on its platform to attract value-seeking consumers looking to stretch their budgets.
“On our platform, retailers that price items at in-store parity consistently grow faster on average than those with markups,” outgoing CEO Fidji Simo said in a letter to shareholders.
Its partnership with UberEats has also helped add restaurants to its platform.
The company forecast current-quarter gross transaction value, or the total money spent by consumers on Instacart orders, to be between $9 billion and $9.15 billion, above estimates of $8.99 billion, according to data compiled by LSEG.
Instacart, like its peers in the food and groceries delivery space, has leaned on promotions on its membership program to keep consumers shopping online, such as lowering minimum order value to $10 to get the delivery fee waived.
Rivals DoorDash and Uber also forecast strong third-quarter results as convenience and affordability driven by investments in membership programs kept consumers ordering food and groceries online.
For the quarter ended June 30, Instacart’s GTV grew 11% to $9.08 billion, with orders growing 17% year-over-year.
Advertising revenue rose 12% in the reported quarter, despite one of its largest brand partners pulling back from some ad spending due to macroeconomic uncertainty, Instacart executives said on a post-earnings call, without naming the company.
Total revenue of $914 million for the quarter topped estimates of $896 million.
The company also reiterated its target for year-on-year GTV growth between 8% and 10%. Quarterly adjusted earnings of 41 cents per share also beat estimates of 38 cents apiece.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Sriraj Kalluvila and Alan Barona)
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