PHILADELPHIA - Rite Aid (NYSE:US90274J5618=UBSS) (OTC: RADCQ) announced today its expanded partnership with Instacart (NASDAQ: NASDAQ:CART), a prominent North American grocery technology company, to offer Electronic Benefits Transfer (EBT) card payments for the Supplemental Nutrition Assistance Program (SNAP) online.
The initiative is available at over 1,400 Rite Aid and Bartell Drugs locations across the United States, aiming to provide convenient access to groceries and pantry essentials for customers with SNAP benefits through same-day delivery.
The new payment feature on Rite Aid's digital storefront via Instacart is designed to facilitate seamless shopping for essential items, enhancing the well-being of SNAP beneficiaries. "By offering this new payment option through Instacart, we are continuing our efforts to provide a flexible and convenient shopping experience for all customers," said Jeanniey Walden, Senior Vice President and Chief Marketing Officer at Rite Aid.
Instacart also emphasizes its commitment to serving SNAP households, which now reach 96% across all 50 states and Washington D.C. Sarah Mastrorocco, Vice President and General Manager of Health at Instacart, stated, "As we expand with trusted retailers like Rite Aid, we’re enhancing our online selection to ensure everyday essentials are easily accessible to everyone in our communities."
SNAP participants can use their EBT SNAP cards to shop for eligible products through the Rite Aid and Bartell Drugs digital storefronts on Instacart's app. At checkout, customers can decide how much of their SNAP benefit they want to apply to their order. The EBT SNAP cards are also accepted in-store at select Rite Aid and Bartell Drugs locations.
The collaboration between Rite Aid and Instacart reflects a broader trend in the retail pharmacy sector toward integrating technology to improve customer convenience and access to essential products and services. This partnership is part of Rite Aid's ongoing efforts to redefine modern pharmacy by offering a variety of solutions, including retail and delivery pharmacy services.
This expansion of payment options is based on a press release statement from Rite Aid Corporation.
In other recent news, Instacart authorized a $500 million stock repurchase, following the completion of a previous $1 billion program. The company also announced a nationwide same-day delivery service in collaboration with The Home Depot (NYSE:HD), broadening its offerings beyond grocery delivery.
In terms of analyst insights, Loop Capital raised Instacart's stock target from $46.00 to $49.00, citing reduced share count and improved earnings estimates. BMO (TSX:BMO) Capital Markets also increased the company's price target to $36.00, based on accelerated growth in Gross Merchandise Volume. Lastly, Piper Sandler adjusted its outlook on Instacart, increasing the price target to $47.00 following strong first-quarter results.
These are the latest developments in Instacart's ongoing business activities.
InvestingPro Insights
As Instacart (NASDAQ: CART) continues to expand its services and partnerships, such as the one with Rite Aid to offer EBT card payments for SNAP beneficiaries, it's worth examining the company's financial health and market position. With a market capitalization of $8.83 billion, Instacart stands as a significant player in the grocery technology and delivery sector. The company's impressive gross profit margins, which have reached 74.44% in the last twelve months as of Q1 2024, underline its ability to efficiently convert sales into profits, a key indicator of its robust business model.
Investors may find it encouraging that Instacart has seen a substantial price uptick over the last six months, with a 41.82% return, reflecting investor confidence and market momentum. This is complemented by the fact that the company holds more cash than debt on its balance sheet, as per InvestingPro Tips, which suggests a solid financial footing and the ability to weather economic fluctuations.
Moreover, Instacart's management is displaying confidence in the company's future through aggressive share buybacks, a move that often indicates a belief in undervalued stock and a commitment to enhancing shareholder value. With 4 analysts having revised their earnings upwards for the upcoming period, prospects for continued growth appear favorable. For those looking to delve deeper into Instacart's financials and future outlook, InvestingPro offers additional tips and metrics. Interested readers can unlock more exclusive insights with the use of coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
As Rite Aid and other retailers leverage Instacart's platform to meet the needs of SNAP participants, understanding these financial aspects can provide a clearer picture of the company's potential in the evolving landscape of online grocery and pharmacy services.
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