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Blue Apron shares up on smaller-than-expected loss

Blue Apron shares were up 6 percent in morning trading on Tuesday after the meal-kit maker reported a smaller-than-expected revenue drop and quarterly loss as a costly distribution hub switch forced it to slash marketing.

Sales plunged 13 percent in the fourth quarter from a year earlier, with customers and orders both falling.

Still, Blue Apron said it started to ramp marketing back up in late December, including launching a new national brand campaign, which it credited to improvements at its new distribution center in Linden, NJ.

The company had said it would boost marketing expenditure as margins improved. The pullback had come despite mounting competition for customers from meal-kit rivals and Amazon.

Costs as a percentage of revenue improved from the third quarter, thanks to better recipe planning at Linden and seasonal benefits like cheaper packaging and fewer seasonal food items in the fall and winter months, Blue Apron said.

It was the company’s first earnings report under new Chief Executive Brad Dickerson, who joined as chief financial officer in February 2016 from apparel maker Under Armour.
Blue Apron, which was founded in 2012, has had a rocky ride since it went public in June, with shares tumbling nearly 70 percent from their IPO price, under pressure from rival startups and Amazon.

The subscription service had 746,000 customers in the fourth quarter through Dec. 31, compared to 856,000 in the prior quarter and 879,000 a year earlier.

Revenue was $187.7 million, exceeding analyst estimates for $185.1 million. Blue Apron had a net loss of 20 cents a share, beating analysts average estimate for a deeper net loss of 27 cents per share, according to Thomson Reuters I/B/E/S.

Source: https://nypost.com/2018/02/13/blue-apron-shares-up-on-smaller-than-expected-loss/

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