Blue Apron posted better-than-expected fourth-quarter earnings today, and as a result, its stock was up roughly 11% in pre-market trading. But the meal-kit company still has problems ahead.
First, the good news: Analysts expected a loss of 27 cents per share on revenue of $185 million. However, the company proved capable of limiting the damage, delivering losses of 20 cents per share. Revenues were also better than anticipated, at $187.7 million, while customers are ordering slightly more than they did in 2017. Blue Apron has also largely finished working on its Linden, New Jersey, fulfillment center, which has been a high source of spending.
Nevertheless, revenues are down 13% year-over-year thanks to a reduction in marketing. And not only are Blue Apron’s customers are on the decline—down 15% from last year—they’re spending less per order.
Blue Apron continues to struggle with marketing spend and customer retention. As the company noted when it filed to go public, it has difficulty attaining and retaining customers. With customers continuing to drop off, there’s no indication that this problem will go away anytime soon.