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Blue Apron’s Bottom Line Improved YoY in the Third Quarter

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Bottom line improves YoY

For the third quarter, Blue Apron Holdings’ (APRN) adjusted EPS came in at -$0.18, which was an improvement compared to the analysts’ estimates of -$0.21 and the Q3 2017 EPS of -$0.47. The company remains focused on cutting costs, and it is also improving the operational efficiency of its Linden fulfillment center.

As a part of making the organization leaner, Blue Apron plans to reduce its workforce by 4%. The reduction is expected to create $16 million in annual savings in 2019. However, this will also lead to $1.6 million in employee severance charges and other exit costs, which will be incurred in the fourth quarter.

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Other details

Blue Apron witnessed 1,010 basis points of improvement in its cost of goods sold (excluding depreciation and amortization) expense rate to 68.0%, which was mainly due to efficiency achieved in food and labor costs.

The third-quarter marketing expenses fell 32.1% to $23.3 million, and its PTG&A (product, technology, general, and administrative) expenses declined 26.5% to $48.4 million. Its total operating costs fell 34.6% to $182.6 million in the third quarter given its cost structure streamlining.

Blue Apron reported adjusted EBITDA of -$18.8 million in the third quarter versus -$48.0 million reported in the same quarter of 2017. This improvement was driven by operational efficiency and cost-cutting efforts. The company’s operating loss was ~$32.0 million, which was narrower than the loss of $68.5 million YoY. Blue Apron posted a third-quarter net loss of $33.9 million versus a net loss of $87.3 million in the third quarter of 2017.

2018 outlook kept unchanged

For 2018, Blue Apron has forecasted its adjusted EBITDA to be -$65.0 million to -$70.0 million. Its net loss is estimated to be $135.0 million to $140.0 million. The company’s net loss for 2017 was $210.1 million.

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