The number of people purchasing Blue Apron's signature boxes of food to make home-cooked meals dropped 9% from the first quarter to 717,000, and the average order value also dipped from a year earlier to $57.34.

(Bloomberg)—Blue Apron Holdings Inc. said customers fell 24% in the second quarter, reversing gains made in the previous period. The number of people purchasing its signature boxes of food to make home-cooked meals dropped 9% from the first quarter to 717,000. The average order value also dipped from a year earlier to $57.34.

Fewer customers led to a 25% decrease in revenue for the period ending June 30. Blue Apron reported $179.6 million in sales, missing even the lowest analyst estimate, according to data compiled by Bloomberg. The company’s loss also widened to $32.8 million, or 17 cents a share.

Blue Apron, No. 67 in the Internet Retailer 2018 Top 1000, was one of the early pioneers in the meal-kit market, but an ill-timed IPO, coming on the heels of Inc.’s (No. 1) purchase of Whole Foods, and competition from Berlin-based service HelloFresh (No. 84), which boasts a customer base of about 1.88 million, have put pressure on customer acquisition costs. The company also had problems at its fulfillment center, which was plagued by delays.

Blue Apron CEO Brad Dickerson called 2018 “a year of transition and building for the future.” On a conference call to discuss earnings, Blue Apron said it expects revenue of $150 million to $160 million in the third quarter, which would mark as much as a 29% decline from the year-earlier period. Analysts’ had been expecting $204.3 million.

“With fulfillment center operations strengthening, we are increasing focus on the priorities we expect will propel revenue performance and return the business to a growth trajectory,” said Dickerson, who took over late last year.


In the coming months, Blue Apron plans to expand its direct-to-consumer offerings through new channels, Dickerson said. The company will test on-demand delivery via its own e-commerce platform and third-party delivery partners, beginning on the East and West coasts. The company recently signed a new multiyear contract with FedEx Corp., its largest transportation and logistics provider, which will “increase efficiencies in much of our last-mile delivery network,” Dickerson said.

He reaffirmed Blue Apron’s goal of achieving double-digit revenue growth and break-even adjusted EBITDA for 2019 while acknowledging that “this milestone will not be easy.”

This fall, Blue Apron plans to introduce recipes that can be prepared more quickly than its current offerings, as well as meals that comply with Whole30 clean-eating guidelines. The company first introduced an eight-week partnership with Whole30 in January. Dickerson also announced that Blue Apron’s meal-kits are now available in about 80 Costco Wholesale Corp. (No. 12) locations, after launching a pilot program with the warehouse store in May.

Blue Apron introduced new partnerships in the second quarter with high-profile names including social media influencer Chrissy Teigen, Airbnb Inc. and the James Beard Foundation. The company also strengthened its executive team with the appointment of Tim Bensley, formerly CFO at Acosta Sales & Marketing Corp., as chief financial officer, and Alan Blake as chief supply chain officer.