CHESAPEAKE, Va. - Family Dollar, a subsidiary of Dollar Tree, Inc. (NASDAQ: NASDAQ:DLTR), has announced a partnership with Instacart (NASDAQ: NASDAQ:CART), allowing customers to use Supplemental Nutrition Assistance Program (SNAP) Electronic Benefit Transfer (EBT) for online orders. This initiative aims to enhance the shopping convenience for SNAP recipients by providing same-day delivery service for eligible items.
Previously, Family Dollar stores accepted SNAP/EBT payments only in-person. With the new collaboration, customers can now use this payment method to purchase SNAP-eligible items on Family Dollar’s mobile app and storefront page on the Instacart app and website. This expansion of service is part of Instacart's commitment to increase accessibility for SNAP families to shop online with their benefits.
Larry Gatta, Chief Merchandising Officer for Family Dollar, expressed the company's enthusiasm for extending the convenience of same-day delivery to customers, especially for essential family items. Sarah Mastrorocco, Vice President and General Manager of Health at Instacart, echoed this sentiment, noting that nearly 98% of SNAP households can now access groceries and essentials with fast delivery through Instacart.
Family Dollar and Dollar Tree operate over 16,300 stores across the United States and Canada, offering a range of products under the Dollar Tree, Family Dollar, and Dollar Tree Canada brands. This partnership with Instacart is an extension of Family Dollar's commitment to providing quality, value, and convenience to its customers.
The information for this article is based on a press release statement from Family Dollar.
In other recent news, Instacart reported a Gross Transaction Value (GTV) of $8.2 billion and an EBITDA of $208 million. The company also repurchased $117 million worth of its shares from D1 Iconoclast Holdings LP. In governance changes, Instacart expanded its Board of Directors, appointing Mary Beth Laughton, a seasoned leader with experience from Nike (NYSE:NKE) and Athleta LLC, as a Class I director.
In analyst notes, Morgan Stanley cut Instacart's price target from $45.00 to $41.00, citing challenges in expanding its advertiser base. The firm also reduced its forecasts for Instacart's GTV and EBITDA for the years 2024 and 2025. Contrarily, Raymond James initiated coverage on Instacart with a Market Perform rating, while Cantor Fitzgerald started coverage with an Overweight rating and a price target of $45.00, highlighting the company's strong position in the online grocery market.
Instacart has been forming strategic partnerships, integrating Ibotta's extensive catalog of digital coupons into its platform and expanding its collaboration with ALDI SOUTH Group. Despite these developments, KeyBanc Capital Markets maintained a Sector Weight rating on Instacart shares, expressing concerns about the competitive nature of the online delivery market.
InvestingPro Insights
Instacart's partnership with Family Dollar to enable SNAP/EBT payments for online orders aligns well with the company's growth strategy. According to InvestingPro data, Instacart's revenue growth has been robust, with a 10.69% increase in the last twelve months as of Q2 2023, and an even stronger 14.94% growth in Q2 2023 alone. This expansion of services could potentially contribute to further revenue growth.
InvestingPro Tips highlight that Instacart holds more cash than debt on its balance sheet, which provides financial flexibility to invest in partnerships and technology upgrades necessary for initiatives like the SNAP/EBT integration. Additionally, the company's impressive gross profit margins of 74.95% suggest it has room to absorb potential costs associated with implementing new payment systems while maintaining profitability.
While Instacart has not been profitable over the last twelve months, InvestingPro Tips indicate that analysts predict the company will be profitable this year. This positive outlook, combined with the fact that 4 analysts have revised their earnings upwards for the upcoming period, suggests that initiatives like the Family Dollar partnership could be contributing to improved financial expectations.
For investors interested in a deeper dive into Instacart's financials and prospects, InvestingPro offers 11 additional tips that could provide valuable insights into the company's performance and potential.
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