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Blue Apron Holdings Inc. (NYSE: APRN) has managed to deliver on its promise to be profitable in the first quarter of 2019. That was true with an adjusted earnings report (before interest, taxes, depreciation and amortization) of $8.6 million. It lost $5.3 million in the quarter, or −$0.03 per share. That beat the consensus analyst target of a per-share loss of $0.07 and was far better than the $0.17 per share loss a year ago.

With a new, more pedigreed chief executive officer set to lead the charge, investors still have every right to question the Blue Apron model. Its shares sticking so close to the $1.00 level is a testament that Wall Street is going to demand more proof of life before paying any thoughtless ransom or bounty here.

Blue Apron’s revenues were $141.9 million in the first quarter, down 28% from $196.7 million for the same quarter of last year. While it has lowered market costs (to $14.2 million from $39.3 million a year earlier), the only way to describe Blue Apron’s customer trends in the past year would be one that is hemorrhaging. With a peak of more than a million customers in early 2017, that customer count was last seen down at about 550,000. It was at 557,000 customers at the end of 2018, and it had 786,000 customers a year earlier.

Blue Apron’s number of orders was 2.482 million in the first quarter of 2019, down from 3.474 million a year ago but up marginally from the 2.418 million orders in the fourth quarter of 2018. That is now up to 4.5 orders per customer in the quarter, versus 4.4 a year ago and 4.3 in the fourth quarter of 2018. Average revenue per customer also went up to $258, from $252 at the end of 2018 and $250 a year ago.

While it is easy to be skeptical or down on Blue Apron, some other issues are looking better here, ones that could act as a springboard for its new CEO to help catapult the company even as investors have every reason to demand more proof.

The company did deliver operating cash flow of $5.1 million and free cash flow of $3.4 million in the first quarter of 2019. It also improved its cost of goods sold by an impressive 750 basis points from a year earlier and 250 basis points sequentially (to 58.3%, as a percentage of net revenue) after implementing operational efficiencies via enhanced fulfillment center processes.

What has happened internally is that Blue Apron’s founding leaders have all now left or been forced out. The initial public offering was the peak, and the IPO presentation tried to use every new-age business buzzword that the company could throw out in its pitch.

Linda Kozlowski, the company’s new CEO, is targeting a higher spend from existing loyal customers to drive profitability. This may be possible, based on what was seen in the first quarter, but it is also not an assured outcome as the meal-kit business has turned into a niche somewhere between retail groceries and e-commerce.

One issue about the meal-kit business should be noted. The younger generations who were not previously cooking needed (and may still need) help to learn how to cook. Meal-kits also can be better for sensible portions, and they may even be better in many cases for health. But there is something that may prove to be impossible to overcome. Once a person has started cooking and gets the hang of it, they might want to venture out beyond “building blocks cooking” and just start buying food from their local stores. After all, many meals can be cooked from scratch for far less than having preassembled meal-kits delivered to your front door.

Kozlowski said of the quarter:

I am thrilled to join Blue Apron as CEO and see significant opportunities ahead for the company as we deepen our relationship with customers to bring them more creativity, discovery and connection through cooking at home. Having achieved the important milestone of profitability on an adjusted EBITDA basis, positive operating cash flow, and set a company record for operational efficiency, we are now focused on leveraging this strong foundation as we build a strategy to reinvigorate the business for future sustainable growth.

Shares of Blue Apron were last seen trading up 1% at $1.05, in a 52-week range of $0.65 to $4.15. Its market cap is still just $206 million.

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