Blue Apron deliver$
But says lockdown profits won’t last
Blue Apron’s financials finally look appetizing — but the company warned that its surprise profit won’t last.
The New York-based meal-kit maker swung to a $1.1 million profit in the second quarter — a sharp turnaround from its yearago loss of $7.7 million — as the coronavirus pandemic kept restaurants shuttered and more consumers cooking at home.
The eight-year-old company, however, warned demand will likely taper off next year and that it hopes to maintain “a portion of the [current] demand” through the end of 2020.
Blue Apron expects third-quarter revenue to jump 13 percent in the current quarter, but said it also expects to post a quarterly loss as high as $18 million.
Blue Apron shares — which have surged more than fivefold since the pandemic hit in mid-March — plunged 13 percent to $12.24 on Wednesday.
Blue Apron said its subscription service — which ships fresh, ready-to-cook ingredients in a box a few times a week — got 20,000 new customers during the quarter that ended June 30. The customer boost to 396,000 is still down from 449,000 a year earlier.
Average revenue per customer surged to $331 versus $265 a year ago — a level of spending Blue Apron has not seen in five years, the company said.
That helped boost revenue 10 percent to $131 million — a return to growth that came “sooner than expected,” Chief Executive Linda Findley Kozlowski said in a statement.
To continue momentum, Blue Apron spent more on marketing — $11.6 million in the quarter compared with $9.7 million a year ago.
Just seven months ago, Blue Apron was laying off workers amid fears it might file for bankruptcy, as fewer people were snapping up its $10 meals and subscription service.
Meanwhile, competition from well-funded rival meal-kit services like HelloFresh has intensified.
Blue Apron has struggled to staff its distribution centers and grappled with higher labor costs as it increases wages for front-line employees to meet surging demand. It has also been hit by shortages of some products.