Blue Apron has struggled since going public in 2017
Meal kit delivery company Blue Apron (APRN) has had an extremely difficult time since it went public in mid-2017. The stock is down 85% from its IPO price of $10.0.
The company has faced stiff competition from its rivals Sun Basket and German company HelloFresh, causing its subscriber base to shrink and its revenue to fall. The company has also had to face the looming threat of Amazon (AMZN), which now owns Whole Foods.
The company recently laid off ~4% of its staff, which cost it $1.6 million in severance packages. However, the move is expected to save it up to ten times that amount this year.
Blue Apron said it will see profitability as early as this quarter
Blue Apron finally has some good news. It announced on January 15 that it expects to be profitable on an adjusted EBITDA basis in the first quarter of 2019. The announcement caused its stock to surge over 45.2% on January 15. The company will be disclosing its fourth-quarter and full-year results on January 31.
In the third quarter of 2018, the company posted net income of -$33.9 million, a big improvement from -$87.2 million in the same quarter of the previous year. However, it generated revenue of $150.6 million in the third quarter compared to $210.6 million in the third quarter of 2017.
Recently, Blue Apron has been taking steps to increase its subscriber base. The company has struck a deal with Weight Watchers giving it the rights to sell and deliver Weight Watchers’ meal kits to its customers.