Shares of Blue Apron Holdings, Inc (NYSE:APRN) were getting hammered today after the meal-kit provider reported underwhelming results in its second-quarter earnings report. Revenue plummeted and the company showed little improvement on the bottom line, despite achieving increased efficiencies in some parts of the business. The stock was down 20.3% as of 12:21 p.m. EDT.
The meal-kit service said that revenue fell 25% to $179.6 million, as the company continued to experience a decline in customers following a pullback in marketing last year due to operational challenges at a new production facility. That figure was well below expectations at $188.5 million.
Blue Apron's customer count fell by 24% from a year ago to 717,000, a sign of increasing competition in the industry and the company's own self-inflicted wounds. That customer count was also down from 786,000 in the first quarter, though the company blamed seasonal trends for most of the decline.
On the cost side, Blue Apron did show some improvement as cost of goods sold, which includes food costs and is its biggest expense item, fell by 400 basis points. However, because of the slide in revenue, its bottom-line loss expanded by $1.2 million to $32.8 million, or -$0.17 per share, which was a penny better than estimates.
CEO Brad Dickerson said the company was making progress in its turnaround, saying, "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, including evolving and expanding our product portfolio, enhancing our overall customer experience, and launching our retail and on-demand offerings."
Looking ahead, Blue Apron's guidance wasn't exactly inspiring, as management said it would take longer to return to revenue growth than originally anticipated, adding that revenue would continue to decline in the third and fourth quarters. For the third quarter, the company sees revenue of $150 million to $160 million, or about a 25% decline from a year ago, much worse than estimates at $204.9 million. However, the company expects to trim its full-year net loss of a year ago by about a third to $130 million-$140 million.
Still, the continued decline in revenue is concerning, as the company will never be profitable without consistent revenue growth. Given that forecast and the second-quarter slide, it's not surprising to see the stock approaching all-time lows.