Shares of Blue Apron Holdings (NYSE: APRN), a meal-kit delivery specialist, jumped 11% on Tuesday thanks to investors' faith in the company being renewed after a solid first quarter.
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Blue Apron shares are up more than 30% over the past five trading days and almost 56% over the past month. However, for investors that have been in since the beginning, those gains do little to get the price back to IPO levels.
Management won back some investors by cutting expenses and narrowing its bottom-line loss. Blue Apron's adjusted EBITDA loss went from $46.3 million in the prior-year period down to $17.2 million for the first quarter. "We are pleased with the progress we achieved this quarter, including significant improvement in operational efficiencies as reflected by our margin performance, which was the strongest we have seen since the second quarter of 2016," CEO Brad Dickerson said in a press release.
If Blue Apron wants to win back more investors, it must start growing the top line, which is easier said than done at a time it spends less on marketing. While revenue increased 5% sequentially in the first quarter, it was still 20% lower than the year-ago period. On the bright side, the meal-kit delivery company has started a pilot program with Costco Wholesale to sell four-packs of discounted meals at its warehouses. If the program does well and Blue Apron expands the number of supermarkets it sells in, it could be a huge boost to its sales.
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