Meal-kit delivery company Blue Apron reported a bigger-than-expected quarterly loss and said costs tied to a delay in moving to a new distribution center would pile on to losses this year, driving its shares down 19 percent to a record low.
New York-based Blue Apron`s first report as a public company on Thursday showed it was spending millions of dollars on marketing to sign up new subscribers, but was struggling to squeeze enough revenue from each customer amid stiff competition.
The five-year-old company, which competes with dozens of startups including Hello Fresh and Plated, serves customers who often switch allegiance or cancel subscriptions altogether.
In a potential sign of more competition, e-commerce giant Amazon.com Inc registered a trademark for a similar meal-kit service last month.
That move, along with Amazon`s industry-altering deal to buy upscale grocer Whole Foods Market Inc have weighed on Blue Apron`s shares since their market debut in June.
Shares, which were priced at $10 in the company`s initial public offering, have of late slipped below $6.
Blue Apron said the number of its active customers rose to 943,000 at the end of the second quarter from 766,000 a year earlier. But average revenue per customer dipped nearly 5 percent to $251 as existing customers made fewer repeat orders.
On a post-earnings call, the company said it was facing unexpected expenses related to its transition to a new distribution center in Linden, New Jersey from a facility in Jersey City.
Blue Apron said it expects a net loss of $121 million to $128 million in the second half of 2017 and revenue of $380 million to $400 million.
Operating expenses surged 37 percent, led by an 86 percent increase in product, technology, general and administrative costs to $65.7 million in the second quarter ended June 30. The higher expenses reflected increased hiring as well as the cost of operating two distribution centers in New Jersey.
Revenue climbed nearly 18 pct to $238.1 million, edging past analysts` average expectation of $235.8 million, according to Thomson Reuters I/B/E/S.
But that increase lagged the 42 percent growth in revenue in the preceding quarter, as Blue Apron cut back on marketing.
Blue Apron reported a net loss of $31.6 million, compared with a net income of $5.5 million a year earlier.
On a per-share basis, Blue Apron posted a loss of 47 cents, bigger than the 30 cents analysts had expected.