Dive Brief:
- Blue Apron reported a surprise $1.1 million in profit for the second financial quarter ended June 30, up from a $7.7 million loss during the same period last year, according to the company's earnings report. This is is the first profit the company has reported since going public in 2017.
- The meal kit company gained about 20,000 new customers in Q2 as the COVID-19 pandemic hit the U.S. and customer behavior shifted. The average revenue per customer jumped, as well, reaching $331, a 25% increase year over year, and orders per customer grew by 17%. Blue Apron said these were the highest levels reported since 2015.
- Net revenue increased 10% year over year to $131 million.
Dive Insight:
For Blue Apron, the positive results marks a return to topline growth ahead of schedule and adds financial flexibility for the company so it can continue to execute its strategic growth plan, CEO Linda Findley Kozlowski said in a statement.
In addition to a boost from new customers, Blue Apron has gained traction from a higher marketing spend that totaled $11.6 million Q2. This is a shift in the original direction of Findley Kozlowski, who joined Blue Apron from Etsy last April and planned to cut back on marketing investments and go for higher-dollar customers.
When the coronavirus first hit the U.S., Blue Apron saw a surge in sales and its stock price as more people sought to stay at home and cook their own meals. In addition to buying groceries and cutting back on restaurant meals, customers began giving meal kits a second chance.
Several other meal kit makers have seen sales jump due to COVID-19, including HelloFresh, Home Chef and Sun Basket. The Wall Street Journal reported that revenue for the sector nearly doubled from last year after continued losses earlier in 2020. In-store meal kits also remain important for retailers as shoppers look for easy meal solutions and convenient options to prepare and cook at home.
But meal kits still have to contend with high costs and low customer loyalty. During its earnings call, Blue Apron noted demand is expected to taper off next year as consumer behavior readjusts and the pandemic fades. Performance through the year is also uncertain, with the company anticipating a revenue jump in Q3 but also expecting a quarterly profit loss of as much as $18 million.
