Blue Apron (NYSE:APRN) will report its second-quarter earnings results before the bell on Aug. 2. The stock has been on a bit of a roller-coaster ride lately, so some more concrete news from the meal-kit company could set it off in either direction. The analysts consensus currently calls for a loss of $0.18 per share on revenue of $188.4 million. That's a 20% year-over-year decline in revenue, but an improvement in profitability.

Investors will want to dig much deeper than the headline numbers, though. Management is currently in the midst of a big push to ramp up marketing and achieve break-even EBITDA by the end of the year. Here's what investors should be looking for when Blue Apron reports its results next week.

A family cooking a Blue Apron recipe in a kitchen.

Image source: Blue Apron.

Marketing spend rising

Blue Apron started pulling back on marketing spend during the second quarter last year as it began facing operational challenges at its Linden, New Jersey, facility. It may have also pulled back as a result of worry from investors after the company released its IPO registration filings.

After losing hundreds of thousands of customers and correcting the biggest problems at Linden, Blue Apron is ready to start spending on marketing again. In the first quarter, the company increased marketing spend 56% sequentially to $39.3 million. Investors should look for a continued increase in marketing spend in the second quarter.

They should also look to see how the higher spending is translating into net customer additions. Blue Apron added 40,000 new customers in the first quarter, its first increase since Q1 of last year. The second quarter typically isn't as strong as the first quarter due to seasonality, but an increase in marketing momentum may be able to offset that pressure.

Blue Apron's marketing efficiency may also be challenged by the growth in competition over the past year. Kroger with Home Chef, Albertson's with Plated, and Walmart developing its own meal kits all present serious challenges to Blue Apron that didn't exist in their current form two years ago. Keeping marketing costs under control while producing net customer adds will be key to Blue Apron's goal of break-even EBITDA.

COGS in the machine

One area where Blue Apron showed a lot of promise in the first quarter is in reducing its cost of goods sold, or COGS. The number fell from 68.8% of revenue to 65.8% of revenue in the first quarter. Management guided for full-year COGS to come in between 65% and 66%.

The second and third quarters are generally more challenging for COGS due to higher shipping costs associated with shipping fresh food in the summer heat. That will have a large impact next quarter, but it won't go unnoticed in the second-quarter results. Management expects to make up the difference by continuing to improve the efficiency of its Linden facility.

During the company's first-quarter earnings call, management noted the Linden plant is still its least labor-efficient facility. It expects Linden to eventually become its most labor-efficient facility due to all the automation technology in the plant. Considering Linden covers half of Blue Apron's footprint, continued improvements in labor efficiency at the plant will have a dramatic impact on the company's overall COGS.

Blue Apron is also taking initiatives to reduce COGS by managing food and packaging waste. Additionally, its partnership with Costco could help reduce packaging and shipping expenses, but those savings might be fully priced into the lower in-store prices available at the warehouse club stores.

While investors will want to pay attention to Blue Apron's top and bottom lines, they'll still want to dig deeper. It's important to see if management's investments in marketing are driving the top line and customer additions, as well as whether initiatives to cut cost of goods sold are working to improve profitability.