Instacart to Wind Down Caper Cart

What happened

Instacart said it will wind down its smart shopping cart operation, Caper Cart, and expects to record pre-tax charges of about $55 million to $80 million. The wind-down should be substantially completed by the end of the second quarter of next year.

Confirmed

Global impact / market context

The charges cut into profit and include about $12 million to $17 million of employee termination costs, so cash and reported earnings take a hit. Money saved from ending Caper Cart is to be reinvested in growth projects, shifting spending toward other priorities.

Analyst inference

The exit narrows Instacart's hardware ambitions as the Wall Street Journal reports DoorDash is in advanced talks to acquire the company, a deal that could close as soon as this week. Cost cuts may make the business look leaner to a buyer.

Analyst inference

What to watch

1. Charges will include about $21 million to $36 million for ending contractual obligations, $22 million to $27 million for impairments of long-lived assets, meaning write-downs of equipment and other assets, and $12 million to $17 million for employee termination costs. Confirmed
2. Watch whether the reported DoorDash acquisition talks, which could be completed as soon as this week, lead to a deal, and how the Caper Cart wind-down charges affect the terms. Proposed
3. Track where the savings from the wind-down are reinvested into strategic growth initiatives, and whether those investments support revenue and profit per sale after the hardware exit. Analyst inference

Evidence

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