Narrower-than-expected loss per share
This morning, Blue Apron Holdings (APRN) is trading ~7% higher in the pre-market trading hours after reporting its 1Q18 earnings results. Its adjusted loss per share was $0.17, which came in narrower than the analyst estimate for a loss per share of $0.24.
On the other hand, sales of $196.7 million fell short of the analyst estimate of $197.3 million. On a YoY (year-over-year) basis, net revenue was down 20% as the company intentionally reduced its marketing spending considerably.
Blue Apron lowered its marketing spending as it diverted resources to speed up operations at its Linden, New Jersey, fulfillment center. The company stepped up its marketing efforts in the last week of December 2017. Management has stated that, with increases in marketing spending, net revenue was up 5% on a sequential basis.
Blue Apron is the pioneer in the field of meal kit delivery services. However, this space is crammed with the arrival of both large and smaller players like Kroger (KR), Walmart (WMT), Amazon (AMZN), Hello Fresh, and Marley Spoon. As a result, to attract more customers, the company is overhauling management, cutting costs, and improving product offerings. The company has been focusing on automating its entire production process at its facilities to cut down costs and reduce fulfillment time.
A quick look at other key metrics for 1Q18
In 1Q18, Blue Apron reported negative adjusted EBITDA of -$17.2 million, compared with -$46.3 million in 1Q17. The improvement was driven by operational effectiveness as well as cost cuts. The company’s operating loss also narrowed to $29.9 million versus a loss from operations of $51.7 million in 1Q17. The primary factor was a reduction of 23.6% in operating expenses on a YoY basis.
In 1Q18, Blue Apron’s customer base decreased 24.1% YoY to 786,000, and its orders decreased 18.7% to 3.5 million. The average order value was $56.58 in 1Q18, down from $57.23 reported in 1Q17.
However, the company’s average revenue per customer increased to $250.00 in 1Q18, compared with $236.00 in 1Q17. Its orders per customer also increased to 4.4 compared with 4.1 in 1Q17.