Blue Apron Holdings Inc on Thursday reported a bigger-than-expected loss in its first quarterly report as a public company as the meal-kit delivery service spent heavily to woo customers, sending shares skidding 19 percent to a record low.
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Blue Apron has spent millions of dollars on marketing to sign up new subscribers, but has struggled to significantly squeeze more revenue from each customer amid stiff competition.
The five-year-old company, which competes with dozens of other startups including Hello Fresh and Plated, serves customers who often switch allegiance or cancel subscriptions altogether.
In a potential sign of more competition, e-commerce giant Amazon.com Inc registered a trademark for a similar meal-kit service last month.
That move, along with Amazon's industry-altering deal to buy upscale grocer Whole Foods Market Inc have weighed on Blue Apron's shares since their market debut in June.
Shares, which were priced at $10 in the company's initial public offering, have of late slipped below $6.
Blue Apron said the number of its active customers rose to 943,000 at the end of the second quarter from 766,000 a year earlier. But average revenue per customer dipped nearly 5 percent to $251 as existing customers made fewer repeat orders.
Operating expenses surged 37 percent, led by an 86 percent increase in product, technology, general and administrative costs to $65.7 million in the second quarter ended June 30. The higher expenses reflected increased hiring as well as the cost of operating two distribution centers in New Jersey.
Total revenue climbed nearly 18 pct to $238.1 million, edging past analysts' expectations of $235.8 million, according to Thomson Reuters I/B/E/S.
But that increase lagged the 42 percent growth in revenue in the preceding quarter, Blue Apron said, as it cut back on marketing. Marketing spending represented 14.5 percent of revenue in the latest quarter, compared to nearly 16 percent a year earlier.
Blue Apron reported a net loss of $31.6 million, compared with a net income of $5.5 million a year earlier.
On a per-share basis, Blue Apron posted a loss of 47 cents, bigger than the 30 cents analysts on average had expected.
The company's shares were down 16.7 percent at $5.20 in early trading on Thursday. (Reporting by Gayathree Ganesan in Bengaluru; Editing by Sai Sachin Ravikumar)