Published: Thu, November 02, 2017
Finance | By Claude Patterson

Blue Apron Makes the Cut Despite Q3 Loss

Blue Apron Makes the Cut Despite Q3 Loss

The five-year-old company is also facing intense competition from other startups such as HelloFresh and Plated as well as Amazon.com Inc (AMZN.O), which recently launched its Amazon Fresh grocery service and also began selling meal kits.

Blue Apron also reiterated forecasts for net revenue in the second half of $380 million to $400 million.

Blue Apron said the number of its active customers fell 6 percent in the latest quarter to about 856,000.

Given the removal of this obstacle, investors might be disappointed that Blue Apron didn't increase its revenue forecast for the second half of the year.

Sales increased 2.5 percent to $210.6 million in the quarter ended September 30.

At about $800 million, Blue Apron is now worth more than twice as much as HelloFresh, whose market value is $381 million. The company has also struggled with customer retention. Chief Executive Officer Matt Salzberg said shrinking the workforce was necessary for "future growth".

HelloFresh revenue grew 53 percent in the second quarter of the year, compared with a year earlier, according to FactSet data.

The bad news for APRN stock got its start today with losses per share of 47 cents for the third quarter of 2017. Blue Apron has also spending much less on marketing, which is closely correlated with revenue growth.

For its recent quarter, Blue Apron reported revenue of $210.6 million for the third quarter, which came in ahead of analyst's expectations and marked a 2.5% rise relative to a year ago.

Marketing expense this quarter was $34.2 million, a 31 decline from the prior year. The company had 856,000 customers, a 5.6 percent drop from a year ago and a 9.2 decline from the second quarter. Blue Apron's new facility in New Jersey has been plagued by delays, which has affected the quality of deliveries.

Blue Apron on Thursday also scrapped plans to build a facility in Fairfield, California.

Shares in Blue Apron, which have fallen more than 50 percent since their June market debut, lost another 8 percent on Thursday morning, hitting their lowest ever level at $4.28.

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