Blue apron earnings6/27/2023 ![]() ![]() ~Revenue = Average Revenue Per Customer x Total Customers That being said, I did not find this development as surprising given I had already forecasted a similar decline following the prior quarter's results and guiding commentary. Even Maria Ripps, CFA of Cannacord Genuity, one of Blue Apron's biggest Bulls, pressed leadership on this issue seeking an explanation. CEO Linda Kozlowski spun this as a positive citing these levels were higher than at the end of Q4 2019 but ignored the fact that it represents a loss of almost all of the net-additions from Covid-19 and that it is a 33% decline from Q3 2019. ![]() Source: Blue apron quarterly press releaseĮveryone listening to Thursday morning's investor call immediately honed in on the precipitous decline in customer count from the prior quarter down from 396,000 to 357,000. The company has lost almost all of its COVID-19 net additions, and it seems unlikely their problems will be solved by "growth levers" After careful analysis of the risk factors outlined, updates to my financial model, and consulting with the company's investor relations, I am now warning long shareholders that I predict Blue Apron will face the risk of bankruptcy as early as Q3 2021. I believe the confirmation of both of these concerns in Thursday morning's 10-Q report was undoubtedly the driver of the declines in the company's valuation. Most recently, I published a report exclusive to PRO subscribers warning that the company was likely to face strain resulting from new debt covenants that require minimum customer levels which will impede its ability to continue to scale profitability and that the company would likely lose ~50,000 customers from Q2. ![]() I warned my readers in January that the company would need to explore strategic alternatives due to liquidity issues over a month before the company made an official announcement, and I later warned that the rally opened the door for the company to engage in a dilutive equity raise. A narrative has emerged following an article in Barron's that the decline was spurred by disappointment over the conclusion of the company's strategic review, but I can assure you this is not the primary culprit behind the selling. Blue Apron confirms concerns surrounding compliance with new liquidity and customer-level debt covenantsīlue Apron ( NYSE: APRN) lost just over a third of its market cap following its Q3 earnings disclosure despite reporting top and bottom-line beats in revenue. ![]()
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