Blue Apron ‘Actively Pursuing All Options’ for Financing Following $17M Net Loss in Q1
On an earnings call today, Blue Apron executives said the company is “actively pursuing all options” to bring in much-needed capital as it continues to suffer significant quarterly losses.
During the quarter ended March 31, the meal kit delivery service saw a net loss of $17 million compared with a loss of $38.7 million over the same period last year. Revenue in the quarter fell to $113.1 million, a 4% year-over-year decline.
“While we continue to make improvements to our fundamentals, we need to bring more liquidity into the business in the near-term and we are actively pursuing all options available to us, including one or more financing opportunities and/or other strategic transactions, including significant commercial partnerships,” president and CEO Linda Findley told analysts. When asked by an analyst what a commercial partnership would entail, she declined to elaborate.
In March, Blue Apron amended its note purchase agreement to pay off its dues quicker than originally planned in order to reduce its liquidity covenant. The company breached the agreement late last year when it was unable to secure private placement financing from its lead shareholder, Joseph N. Sanberg, in the originally expected timeframe.
As part of its effort to remedy its financial challenges, the company launched an at-the-market offering for $70 million in February. If completed, the capital will go toward operating expenses and capital expenditures and pay down some or all of its senior secured notes. As of today, all of the $70 million remains available.
To date, the company has repaid $15 million of the total $30 million owed, $7.5 million of which was after March 31. The remaining payments are slated to occur on or before May 15 and June 15. In order to meet the near-term obligations and continue to operate, the report read, Blue Apron will require “sufficient” additional financing prior to the middle of June.
Despite a drop in revenue, the company was able to build its average order size, which rose 11.6% year-over-year to $70.27, attributable to price increases implemented during the second quarter of 2022 along with increased promotional spend. Blue Apron has pivoted its marketing dollars toward performance-based and digital channels, spending $14.7 million during the first quarter of 2023, a 47% year-over-year reduction.
In support of its marketing efforts, the company has continued to build up a network of partnerships. Most recently, it announced a limited edition kit in collaboration with chef Molly Yeh that is available to consumers with or without a subscription.
“In marketing, we delivered a 50% reduction in cost per acquisition and improved conversion on reduced levels of marketing spend,” said Findley in the statement. “Operationally, we continue to identify areas to bring greater efficiencies into the business to better optimize our cost basis as we drive towards profitability and scale.”
She added that the company is taking a “disciplined approach” to cash management, reducing cash flow by 64% year-over-year and 57% sequentially. As of March 31, cash and cash equivalents totaled $31.6 million.
