Blue Apron earns $1.1M profit — but warns that it won’t last
Blue Apron’s financials finally look appetizing — but the company warned that its surprise profit won’t last.
The New York-based meal-kit maker swung to a $1.1 million profit in the second quarter — a sharp turnaround from its year-ago loss of $7.7 million — as the coronavirus pandemic kept restaurants shuttered and consumers cooking at home.
The eight year-old company, however, said demand will likely taper off next year and that it hopes to maintain “a portion of the [current] demand” through the end of 2020. Blue Apron expects third-quarter revenue to jump 13 percent in the current quarter, but warned it also expects a to post a quarterly loss as high as $18 million.
Blue Apron shares — which have surged more than fivefold since the pandemic hit in mid-March — were off 6 percent at $13.24 in early Wednesday trades.
Blue Apron said its subscription service – which ships fresh, ready-to-cook ingredients in a box a few times a week — got 20,000 new customers during the quarter ended June 30. Orders topped more than $300 on average — a level of spending Blue Apron has not seen in five years, the company said.
That helped boost revenue 10 percent to $131 million — a return to growth that came “sooner than expected,” Chief Executive Linda Findley Kozlowski said in a statement. To prop up momentum, Blue Apron spent more on marketing — $11.6 million in the quarter compared with $9.7 million a year ago.
Just seven months ago, Blue Apron was laying off workers amid worries that it might file for bankruptcy, as too few people were snapping up its $10 meals and subscription service.
Blue Apron has struggled to staff its distribution centers and grappled with higher labor costs as it increases wages for its front-line employees. It has also been hit by shortages on some products and has had to delay new launches.