Blue Apron Customer Metrics Off to a Bad Start: Welcome to Being a Public Company!

By gosh, Blue Apron Holdings Inc. (NASDAQ: APRN) has done it again! The pre-fabbed meal delivery service has managed to hit yet another post-IPO low after its first earnings report as a public company. Some of the issues here may be seasonal, but the reality is that Blue Apron has become an eyesore to its investors.

There was at least some good news. Net revenues rose 18% from a year ago based on 23% more customers. Thomson Reuters was closer to $235 million.

But the bad news dominated the report; hence, the new post-IPO lows. Blue Apron reported a wider than expected loss at $0.47 per share, or −$31.6 million. Blue Apron’s customer count also might have been up from a year ago, but the customer base was down 9% sequentially from the first quarter of 2017. Marketing expenses were under a planned cut as well, and the $34.5 million in marketing expenses was 14.5% of revenues.

Then there is some mixed data in the average spending per customer. Average revenue per customer was $251 in the second quarter of 2017, versus $264 in the second quarter of 2016. Still, it was an improvement relative to $236 in the first quarter of 2017.

If you were surprised about the Blue Apron directional move, you haven’t been reading 24/7 Wall St. and seeing our tweets about $APRN. And very few analysts were noting that Blue Apron was worth any more than its IPO price. One research report from a firm not in Blue Apron’s IPO underwriting syndicate even jumped way out ahead of the post-IPO quiet period and said this is destined to be a $2 stock.

This company came public too late, and it was right at the same time that Amazon and Whole Foods were tying up and right before more news of meal kits being prepped for delivery by Amazon. And if you watched the CNBC video interview with Blue Apron’s CEO immediately after coming public you might have been challenged to keep up with counting all the new-age feel-good business terms that sound so nice and cute but that can become jargon and a masking tool for expenses or excuses for potential sales misses ahead.

Blue Apron’s total number of orders in the quarter was 4.033 million, versus 3.399 million a year ago, but that was also down from 4.273 million in the first quarter of 2017. And there is mixed data in the orders per customer at 4.3 in the second quarter of 2017, up from 4.1 in the first quarter of this year but down from 4.4 a year ago.

Matt Salzberg, chief executive officer of Blue Apron, said:

We are beginning a new chapter as a public company, and remain focused on our long-term strategy to build an iconic consumer brand, develop a more diverse product portfolio, and further build out an end-to-end supply chain platform.

Unfortunately, that means a lot of work remains in front of the company at a time when it has ever-growing competition. Whether Blue Apron can ever become profitable remains a topic for debate.

Blue Apron shares were last seen trading down more than 11% at $5.55, on about 7 million shares in the first hour of trading. Its new post-IPO range is $5.03 to $11.00.

Investors really like consistency. In the case of Blue Apron they are getting that consistency. It’s just not the good kind of consistency.

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