Blue Apron posts narrower-than-expected Q1 loss

Meal-kit company Blue Apron Holdings (NYSE: APRN) reported a narrower loss in the first quarter of 2019 helped by lower costs and expenses, despite a 28% dip in revenue. The bottom line came narrower than the analysts’ expectations while the top line missed consensus estimates.

Investors will be looking forward to any hopes from the new executive chief Linda Findley Kozlowski, who will preside her first earnings conference call. The company remained beneficial from the ongoing cost control measures and improving efficiencies across the board.

Net loss for the quarter was $5.3 million or $0.03 per share, narrower than the previous year quarter’s loss of $31.7 million or $0.17 per share. Revenue dropped by 28% year-over-year to $141.9 million, as the company deliberately reduced marketing spend while focusing on marketing efficiency and targeting high-affinity consumers.

The results have been hurt by the continued diminish of customer base due to the slow transformation of the meal-kit industry after Blue Apron helped to popularize it.

Blue Apron continues to struggle on bringing in more customers to its platform. At the end of Q1, it had 550,000 customers compared to 786,000 last year. In the fourth quarter, the company has 557,000 customers. Orders plunged by 29% to 2.48 million while average order value rose by 1% to $57.15. The average revenue per customer increased by 3.2% to $258.

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For the first quarter, cost of goods sold, excluding depreciation and amortization (COGS), as a percentage of net revenue, improved 750 basis points year-over-year from 65.8% to 58.3%. These improvements, led by the company’s Linden facility, were primarily driven by efficiencies gained in labor, food, shipping and fulfillment packaging costs as a result of improved planning and process-driven strategies.

Marketing expense decreased by 64% to $14.2 million. This decrease is consistent with the company’s strategy to focus on marketing channels it believes to be the most efficient and consumers with high affinity and retention within its direct-to-consumer platform.

Shares of Blue Apron ended Monday’s regular session down 0.95% at $1.04 on the NYSE. The stock has fallen over 50% in the past year and over 30% in the past three months.

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