Blue Apron CEO tries to get the recipe right
Blue Apron is off to a rough start as a public company and that has put President, CEO and founder Matt Salzberg in a tough spot to explain weak results and full year expectations.
Salzberg’s goal of building Blue Apron into an enduring and iconic consumer brand has not gone smoothly the past few months. Demand for shares was weaker than expected during an initial public offering in early July, even after the IPO price was reduced to $10 from an initial range of $15 to $17.
Then Amazon decided to acquire Whole Foods, casting a cloud of uncertainty over food retailing and causing Blue Apron shares to tumble further. To make matters worse, Blue Apron reported weaker than expected results during its first quarter as a public company, citing unforeseen operational challenges.
Pending the resolution of fulfillment challenges, marketing at the young company has been reduced which is sure to hurt customer acquisition and retention, leading to a reduced full year outlook and questions about the viability of the meal kit delivery business model. Share of Blue Apron are now around $5.
Salzberg and CFO Brad Dickerson explained Blue Apron’s financial challenges during an earning call on Aug. 10 and why reducing full year expectations is the prudent thing to do. To read what Salzberg and Dickerson had to say, click here.