On November 7th Blue Apron Holdings Inc. (APRN) posted results for the third quarter of fiscal 2022 ending September 30th. Blue Apron should be regarded as a bellwether for the packaged-meal kit segment of food retail.
For the period, the company posted a loss of $(25.7) million on revenue of $109.7 million with an EPS of $(0.74). For the corresponding third quarter of fiscal 2021, the company posted a loss of $(27.5) million on revenue of $109.6 million with an EPS of $(1.13). It is noted that the company benefited from COVID restrictions and home cooking during the third quarter of fiscal 2021.
In reviewing operating parameters, between the third quarter of 2020 and the most recent quarter, orders decreased from 1.7 million to 1.5 million and the number of active customers declined from 350,000 to 323,000. Average orders per customer during Q3 declined from 5.0 to 4.8.
In commenting on the quarter, CEO Linda Findley stated, “During the third quarter, we delivered record levels of Average Order Value and Average Revenue Per Customer. These metrics are supported, in part, by expanded menu variety, including Ready to Cook meals along with seasonal offerings, which continue to resonate well with customers. We are working to balance the performance of our products with our response to inflation. Our focus is to provide value to our customers, while leveraging price and cost discipline to mitigate macro headwinds to target margin improvement over time.”
Linda Finley Koslowski, CEO - Blue Apron |
Ms. Findley added “We also successfully executed an at-the-market offering right after quarter end, resulting in approximately $14.1 million of net proceeds to enhance short-term liquidity. We did so in light of the delay in funding. In addition, midway through the third quarter, we began to identify and put in place cost-saving initiatives designed to manage expenses and improve margins, as we continue to drive towards our goal of long-term sustainable growth.”
On December 8th Blue Apron issued a release including the following statement:-
“Blue Apron continues to identify and execute against multiple initiatives to both reduce expenses, and streamline decision-making and organizational structure, including a plan for meaningful reduction in marketing, consulting and labor spend in 2023.
As such, to create a more nimble, focused organization and to better align internal resources with strategic priorities, Blue Apron is streamlining its personnel this week. This will result in a reduction of approximately 10% of its total corporate workforce. As a result of these actions, the company expects to incur approximately $1.2 million in employee-related expenses, primarily consisting of severance payments, substantially all of which will result in cash expenditures. The company expects to recognize such expenses in the fourth quarter of 2022.
Blue Apron plans to further reduce expenses and has identified expense reductions of up to approximately $50.0 million in 2023, as compared to 2022, including the headcount changes identified above. These savings are planned to be implemented throughout the coming year”.
Blue Apron Holdings has a market capitalization of $27.7 million ($96.6 million at the end of Q2 2022) and carries long-term debt of $71.5 million. APRN has traded in a 52-week range of $9.50 down to $0.60 with a 50-day moving average of $1.87. Approximately 17 percent of the float was short as of November 30th. On a trailing 12-month basis all metrics are negative. Operating margin was -24.8 percent and profit margin -24.2 percent. The company posted a return on assets of -37.0 percent and on equity, -36.5 percent.