Blue Apron has its 1st-ever profitable quarter — but the stock still melted 15%
Varsity Blues... Meal kit company Blue Apron has been sitting on the bench as its rival HelloFresh scores all the points. It was worth $2B when it IPO'd in 2017 — now it’s worth just $160M. Then the pandemic lifted the tide for all at-home-cooking ships, and Blue Apron finally got its shot in the game. It delivered:
- Blue Apron turned a quarterly profit for the 1st time ever, taking home $1.1M compared to a $7.7M loss during the same quarter last year.
- Thank the ARPU: Average Revenue Per User. Blue Apron's ARPU surged 25%, with the average customer spending $331 in the quarter (up from $265). Sales jumped 10%.
But no one was cheering... Sigh. Despite the profit win, Blue Apron stock plunged 15% because:
- Growth was underwhelming, like a poorly seasoned Bok Choy. It added only 20K new customers, a 5% growth bump.
- $18M will be lost this quarter, according to Blue Apron's unappetizing forecast. Higher labor costs (like employee bonuses) are eating into profits.
Blue Apron still has a shrinkage problem... It didn't make a profit because it's growing — it made a profit because the highly unusual pandemic made home-cooking spend surge. Despite its higher ARPU, Blue Apron's customer count is actually getting smaller. It now has 396K customers, down from 449K last year. Investors think the profit was a one-hit pandemic wonder. Since investors are all about future growth, they plunged the stock.