24/7 Wall St.

Blue Apron Holdings Inc. (NYSE: APRN) shares have dropped 80% in the past year and trade as a penny stock at $0.90 a share. CEO Bradley Dickerson took over in November 2017. As long as he holds onto his job at a company he has nearly ruined, investors won’t regain confidence in the company, if that happens at all.

Dickerson’s most significant move is that he laid off 4% of the company’s workforce last month and said that Blue Apron would sharpen its focus. He said he would be “sharpening focus on direct-to-consumer business,” growing “consumer reach through retail channels” and “further optimizing (its) fulfillment center network.” It was not clear what any of that means. However, in sum, they would make Blue Apron profitable on an adjusted EBITDA basis next year.

On the tail of the announcement of changes, Blue Apron reported another horrible quarter. Revenue fell from $211 million in the third quarter of 2017 to $151 million in the most recent quarter. The company’s operating loss did improve from $87 million to $34 million, but the number of customers dropped from 856,000 to 646,000. An improvement is not in sight.

Dickerson commented:

In the third quarter, we outperformed our previously stated adjusted EBITDA outlook, with a 61% year-over-year improvement. While net revenue was in line with our guidance range, we are taking actions to address our top-line performance. As we look ahead, we are confident in our disciplined approach to pursue initiatives that will enable us to realize the results we expect, with a deliberate emphasis on reaching profitability on an adjusted EBITDA basis next year.

Since adjusted EBITDA backs out depreciation and amortization, and share-based compensation, no one cares.

What investors do care about is whether Blue Apron’s revenue growth and customer count can turn positive. There is not a single sign of that. Dickerson has not delivered, and Wall Street doesn’t believe he can.

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