Growth is back on the menu at Blue Apron Holdings (NYSE: APRN). The pioneer of home-delivered gourmet meal kits did something on Wednesday morning that it hasn't done since early 2018: Blue Apron posted revenue growth.
Blue Apron generated $131 million on the top line for the three months ending in June, 10% ahead of the $119.2 million it posted in the prior year's second quarter. After 10 quarters of year-over-year declines -- double-digit percentage declines, at that -- Blue Apron's revenue is finally heading in the right direction.
A long way back
Blue Apron went public at a split-adjusted price of $150 in 2017, so when it bottomed out in early March at $2.01 it was a nearly 99% plunge from its market debut price. The stock is now a seven-bagger from the pandemic low, and its shares have more than doubled year-to-date, rising 114% in 2020 as of Tuesday's close.
It's not just the return to growth that's welcome and refreshing at Blue Apron. Blue Apron posted a sequential increase of 20,000 customers for the period, and the average order per customer of 5.4 is the highest level for the gourmet meal kit provider since 2015. Put another way, the average customer has never placed more orders during a previous quarter of Blue Apron as a public company.
The news gets better on the metrics front. Folks are spending more per order, and that combined with the uptick in frequency finds average revenue per customer climbing a whopping 25% to a record $331 for the quarter. Recent initiatives including teaming up with celebrity chefs and offering premium upgrades for the meal kits are paying off.
Blue Apron's profit of $1.1 million or $0.08 a share may not seem like much, but it's also noteworthy. It's Blue Apron's first quarter of positive net income as a public company.
COVID-19 has naturally spurred a renewed interest in home-delivered meal kits. Folks are discovering or rediscovering the joys of cooking at home in light of shelter-in-place orders, and Blue Apron is sliding in as a popular choice with its pre-portioned ingredients and simple instructions for preparing high-end meals.
The real test will inevitably come now as more of the country emerges from cabin fever to hit up local eateries for takeout or delivery at least. Blue Apron's guidance calls for $112 million in revenue for the current quarter, and while that's a sizable sequential dip from the $131 million it just served up, this is a seasonal business -- and not just because of the seasoning packets. Blue Apron's guidance implies top-line growth of 13% for the current quarter, so we're seeing accelerating year-over-year revenue production. It's also modeling a much smaller deficit than it posted in last year's third quarter.
Blue Apron still has a lot to prove. It continues to be one of the worst performers of the IPO class of 2017. However, for investors that have bought in earlier this year Blue Apron has repositioned itself as one of 2020's biggest winners. This is a brutally competitive niche, but we now see that it can be profitable in a growing environment. The gourmet meal-kit market was in a slow-simmering crockpot, and the pandemic has popped the niche into the microwave. Blue Apron is finally living up to its IPO hype. It's a shame it had to go to the brink of extinction to bounce back.
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