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What’s Supporting Blue Apron’s Bottom Line in 2018?

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Bottom line performance

In the first quarter, Blue Apron delivered adjusted EPS of -$0.17, easily besting analysts’ consensus estimate of -$0.24. In the second quarter, its adjusted EPS of -$0.17 were in line with the estimate. In the third quarter, its adjusted EPS of -$0.18 bested the -$0.21 projected by analysts.

Blue Apron remains focused on cutting costs. It’s also enhancing the efficiency of its Linden fulfillment center. Recently, Blue Apron announced that it was also slashing 4% of its workforce. The cuts are expected to result in $16 million worth of annual savings in 2019.

However, its adjusted EPS in all three quarters of 2018 came in lower YoY (year-over-year).

For the fourth quarter, analysts expect Blue Apron to deliver adjusted EPS of -$0.17. In the fourth quarter, the announced job cuts are expected to result in $1.6 million worth of employee severance charges and other exit costs.

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A look at expenses and margins

In the first, second, and third quarters, Blue Apron’s cost of goods as a percentage of revenue improved 310 basis points, 400 basis points, and 1,010 basis points, respectively, driven by efficiencies achieved in food and labor costs.

Marketing expenses were down 35.1% in the first quarter and fell 32.1% in the third quarter. In the second quarter, its marketing expenses were almost flat YoY.

APRN’s first-quarter adjusted EBITDA of -$17.2 million came in better than the -$46.3 million it reported in the same period of the previous year. Its second-quarter adjusted EBITDA came in at -$17.5 million compared to the -$23.9 million it reported in the second quarter of 2017. Its adjusted EBITDA of -$18.8 million in the third quarter was better than the -$48.0 million it reported in the same quarter of 2017. Its EBITDA improvement was the result of its operational effectiveness and cost-cutting measures. For 2018, Blue Apron expects its adjusted EBITDA to be between -$65.0 million and -$70.0 million.

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