The Blue Apron blues
Customer counts and order volume are down again at Blue Apron following a reduction in marketing expense while the company addresses operational challenges.
For the fourth quarter ended Dec. 31, net revenue at Blue Apron decreased 13% year-over-year to $187.7 million, driven primarily by a decrease in customers and orders. The company blamed the decreases on a scaling back of marketing efforts.
The company reported 746,000 customers on Tuesday, down 15% from a year earlier and 13% from three months prior. At its peak early last year, Blue Apron had more than a million customers buying its meal kits.
CEO Brad Dickerson told The Wall Street Journal that the company plans to start advertising again this year to attract customers and aims to break even in the next fiscal year.
“We are methodically implementing operational improvements to drive our business and are encouraged by the progress we’ve made since last quarter, particularly in margin which contributed to improvement in our bottom-line performance,” stated Brad Dickerson, Chief Executive Officer, Blue Apron Holdings, Inc. “Our top priority remains continuing to drive operational efficiencies that will propel significant improvement in our net loss and adjusted EBITDA in 2018. We also believe there are extensive opportunities to diversify and evolve the business in new ways to expand our reach and deepen our engagement with customers and we are sharpening our focus on these windows of opportunity.”
Blue Apron has been struggling to overcome operational issues that have dragged its stock down more than 66 percent since it started trading in late June. Shares have slipped from $11 to just under $4 during that period.
As Blue Apron has faltered, competition to sell meal kits has grown. Everyone from Walmart to Kroger to convenience stores are now offering meal kits.
In the fourth quarter, average revenue per customer at Blue Apron rose to $248 from $245 in the third quarter and $246 a year earlier. Revenue was $187.7 million, down 13 percent. Net loss was $39.1 million and diluted loss per share was 20 cents.
The meal kit company said increased automation bolstered has productivity in its New Jersey fulfillment center and brought it in-line with its counterparts in California and Texas.