Categories Analysis, Retail

Blue Apron Earnings Preview: Shrink in customer base to hurt Q3 results

Meal-kit company Blue Apron Holdings (APRN) is set to release its third-quarter results on Wednesday before the bell. The results are likely to be hurt by the continued shrink in customer base and thereby continuing the protracted losing streak.

Analysts, on average, expect the company to report a loss of $0.21 per share on revenue of $157.15 million for the third quarter. In comparison, during the previous year quarter, Blue Apron reported a loss of $0.47 per share on revenue of $210.64 million. Majority of the analysts recommended a “hold” rating on the stock with an average price target of $2.71 per share.

For the second quarter, Blue Apron’s revenue fell by 25% year-over-year hurt by lower demand. While the number of customers decreased by 24%, average revenue per customer edged down to $250 from $251 in the second quarter of 2017. Net loss narrowed from last year helped by a 22% decline in general & administrative expenses as well as other expenses remained broadly unchanged year-over-year.

Blue Apron reports Q2 loss on lower revenues; stock plunges

During mid-August, the company announced The September Whole30: a new selection of Whole30 Approved recipe offerings intended to ease meal planning and preparation for customers following the 30-day lifestyle program. The company has come out with a new meal plan for attracting customers.

In addition, during early October, Blue Apron launched its first on-demand delivery offering, with the new pilot program in New York City. A rotating selection of Blue Apron meals was made available for on-demand consumers from selective zip codes in New York City on the GrubHub and Seamless online and mobile platforms.

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Blue Apron refinanced its existing revolving credit facility. As part of the refinancing, the company amended the revolving credit agreement with its existing lender syndicate, led by Morgan Stanley, to extend the final maturity date of the facility from August 2019 to February 2021, reduce the aggregate lender commitments to $85 million, and lift the applicable interest rate spread currently paid by the company by 200 basis points.

The company is trying out certain things of turning the public into prospective customers. For the third quarter, Blue Apron is expected to report a narrower loss due to a dip in general & administrative expenses. On the other hand, revenue is predicted to fall year-over-year due to lower demand.

The shares have fallen over 70% in the year so far and over 44% in the past three months. The stock opened Monday’s regular session higher but turned negative in the early trade. However, the stock is trading positively just an hour left for market close.

 

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