Earlier this month, the meal delivery service Blue Apron released its first quarterly earnings report after the company went public in June of this year.
It declared a surprising $238 million in revenue (a number which surpassed analyst estimates of $235.8 million, according to Bloomberg,) but a disappointing $31.6 million in losses and a decline in subscribers. Blue Apron had 1 million customers before going public, which dropped to 938,000.
On an earnings call, the loss in costs were blamed on Blue Apron’s fulfillment center expansion from a smaller warehouse in Jersey City, New Jersey to a larger facility in Linden, New Jersey.
This new warehouse comes with technology improvements, which will help the company become more automated. The transition requires further training on new systems for employees at this new fulfillment center and has forced Blue Apron to cut costs by firing part of its recruitment team. The company announced it is also implementing a hiring freeze on salaried employees and is reducing its marketing budget.
As a result, Blue Apron shares dropped 18 percent to $5.14 by the end of the trading day in New York on August 10.
With a smaller marketing budget, limited capital, and a shrinking subscriber pool— how can Blue Apron assure steady growth?
Luckily, after Jana Partners disclosed a 2 percent stake in the company, shares rose as much as 5.3 percent and the stock was up 3.1 percent to $5.28 on August 14.
But even with the small stock hike, Blue Apron’s shares are down almost 50 percent since their debut in June and are currently trading lower while the stock is down over 4 percent as of 2:10 p.m. in New York on August 29.
When Foodable first reported on Blue Apron’s IPO debut, the e-commerce subscription business had detailed a $800 million in annual revenue and 54.9 million in losses in 2016. It will be interesting to see how Blue Apron performs in its first year of going public as it goes head to head with other subscription-box and meal-kit companies, as well as e-commerce giants like Amazon as it becomes more of a well-defined competitor in the multifaceted food space with its recent acquisition of Whole Foods.