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 year-ago loss of $7.7 million — as the coronavirus pandemic kept restaurants shuttered and 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 a 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 ended June 30, bringing the total to 396,000 versus 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 prop up 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 worries that it might file for bankruptcy, as too few 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 its front-line employees to keep up with surging demand. It has also been hit by shortages on some products and has been forced to delay new product launches.
The company last year tapped Kozlowski as CEO. Since, the company has made its menu more flexible and cut partnerships with Beyond Meat, the plant-based meat maker, and WW, the company formerly known as Weight Watchers.
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