A Reduced Customer Count Is Impacting Blue Apron’s 2018 Revenue


Dec. 11 2018, Updated 3:15 p.m. ET

Revenue trails estimates

In the trailing five quarters, Blue Apron Holdings (APRN) has missed estimates on three occasions while reporting beats twice.

In 2018, Blue Apron missed analysts’ sales estimate by 0.3% in the first quarter and by 4.7% in the second quarter. In the third quarter, its sales again fell 4.2% short of estimates. The company has reported YoY (year-over-year) revenue falls in all three quarters of 2018 so far. On a YoY basis, its revenues in the first and second quarters fell 20% and 24.6%, respectively. In the third quarter, its revenue was down 28.0%.

Reduced customer numbers have been driving the fall. In the third quarter, Blue Apron’s customer base decreased 24.5% YoY to 646,000. Blue Apron attributed the loss in customers to its reduction in marketing spending. In both the first and second quarters, its customer base shrank ~24%.

For the fourth quarter, analysts expect Blue Apron to deliver a revenue fall of 26.8% to $137.4 million. For the fourth quarter, Blue Apron’s management expects its revenue performance to be identical to its third-quarter performance.

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The road ahead

Blue Apron is working on its multiproduct, multichannel strategy. It’s developing multicourse meals that include entrées, appetizers, and side dishes to help customers host gatherings. Blue Apron is also working on a grill-friendly menu.

Blue Apron is focusing on improving its retail partnerships and on-demand offerings to improve brand visibility. Recently, Blue Apron tied up with WW International. It plans to launch a wide range of recipes that will be commensurate with WW International’s purpose of helping people manage their weight.

To sell its meal kits, Blue Apron has partnered with e-retailer Jet.com. It’s also joined hands with GrubHub (GRUB), an online food delivery platform, to sell meal kits, and it’s partnered with Costco Wholesale (COST) to sell its meal kits at ~80 Costco locations. However, the Costco partnership has been put on standby for the holiday season.

Blue Apron is looking to collaborate with other retailers as well. It’s also looking to expand on the West Coast and is looking for a third-party collaborator for deliveries.


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