Meal kit delivery service Blue Apron managed to cook up a Q4 earnings beat this time around, and investors liked what they saw well enough to pick up 9 percent on Tuesday (Feb. 13) after the firm managed lower-than-expected losses. According to CNBC reports, Blue Apron credited operational improvements at its New Jersey plant for much of those improved Q4 figures.
Losses fell to $39.1 million, or $0.39 per share. Analysts had been looking for a loss of $0.27 per share. Revenue was down 13 percent on the quarter to $187.7 million as customers decreased in response to Blue Apron’s planned scale back of its marketing efforts. Company CEO Brad Dickerson said the firm would continue to shrink its marketing costs, indicating the revenue fall would likely persist. All in, Blue Apron shelled out $25.2 million, or 13.4 percent of its revenue, on marketing in the fourth quarter. During the same time frame in 2016, Blue Apron spent $37.1 million on marketing.
Year-on-year, Blue Apron’s customers fell 15 percent and 13 percent in the same quarter, though average revenue per customer increased to $248 from $246 the year before.
Blue Apron has been dealing with well-publicized operational issues that have, in turn, exerted real pressure on stock prices. The company went public last year, but was recently listed as the worst performing tech initial public offering (IPO) of 2017 by Crunchbase. Stocks have fallen 66 percent since the firm’s June 2017 IPO, with shares since slipping from an IPO price of $11 to just under $4.
Dickerson, who became CEO in November 2017, cited growing competition, decreased marketing and slower customer acquisition for its public issues.
To combat that rising competition in the space, and help grow its customer base, Blue Apron recently began offering specialized programs like its Whole30 meal plan. The 30-day plan features “whole” foods like fresh fruits and vegetables, avoiding alcohol, dairy, grains, soy and sugar.
Blue Apron plans to continue offering its other flexible plans and recipes, meals that can be compiled in 30 minutes and options with less cleanup. It will also look to revive some of its customers’ favorite recipes.