- Introduced Next Phase of Strategy Towards Path to Adjusted
EBITDA Profitability in 2023 and Free Cash Flow Generation in
2024
- Highlighted Drivers of Success Behind Eight Straight Quarters
of Elevated Customer Metrics
- Outlined Plans to Drive Customer Growth Through Targeted
Marketing Spend, Product Innovation, Customizations, Add-ons, and
Non-Subscription Offerings
- Targeted Long-Term Steady-State Variable Margin of 40% and
PTG&A of 20% of Revenue
- Discussed Strategy to Responsibly Deploy Recent Equity Capital
Raised to Invest in Platform to Help Execute Its New Strategy
Blue Apron (NYSE: APRN) hosted its inaugural Investor Day on May
10, 2022 at its fulfillment center in Linden, New Jersey.
Management unveiled The Next Course strategy, and discussed the
company’s strategic plans and outlook relating to its business,
including details on its path to achieve adjusted EBITDA
profitability in 2023 and positive free cash flow in 2024. The
company also provided greater visibility into its near-term
financial and operational performance expectations and targets.
Linda Findley, Blue Apron’s President and Chief Executive
Officer, commented, “This is an exciting time for Blue Apron as we
step into the next phase of our turnaround. With the customer at
the center of everything we do, we are moving beyond the three
pillar strategy that we introduced shortly after I joined Blue
Apron in 2019. The next phase of our strategy, which we have titled
The Next Course, will be focused on delivering long-term
sustainable growth, and sets our sights on profitability at the
adjusted EBITDA level in 2023. It also positions our ESG programs
as an enabler of our long-term ambitions, simultaneously driving
accountability to the environment, customer growth and employee
engagement.”
The Next Course strategy outlines a path to sustainable
growth, profitability and shareholder return. Blue Apron’s
long-term goal is for the company to be the first choice for
consumers who seek out curated food experiences that meet the needs
of their household and enhance their lives. The company plans to
expand beyond traditional meal kit subscriptions, including
building an ecosystem of partners that creates Better Living
Through Better Food™.
Blue Apron identified three objectives it will simultaneously
target to drive growth over the next three years:
- Curated Customer Experiences - Drive customer growth and
expand market share in target segments by deepening engagement
through an ecosystem of marketing, partnerships and new
products.
- Scalable Platform - Optimize tech and operational
infrastructure to deliver an agile, scalable and seamless
e-commerce experience with subscription at its core.
- Sustainable Profit - Execute ESG initiatives that meet
customer priorities, drive employee engagement and create
shareholder value.
Randy Greben, Blue Apron’s Chief Financial Officer, discussed
the company’s 2022 financial outlook, identified new areas for
growth, and reviewed the company’s target of achieving adjusted
EBITDA profitability in 2023 and positive free cash flow generation
in 2024.
Greben commented, “Our strengthened balance sheet positions us
to execute against the next evolution of our strategic plan with
targeted marketing spend, continued investment in product
innovation, and the build out of other revenue streams via
partnerships, add-ons and marketplace offerings. We believe we can
not only make meaningful progress on our path to profitability, but
can do so while staying true to our guiding principles to serve all
of our stakeholders. We see our path to 2024 - with set goals of
having at least 500,000 customers, at least $700 million in
revenue, with adjusted EBITDA margins of more than 2% and positive
cash flow generation. We are excited about our prospects and all
the different areas of growth that we see available to us.”
Financial Outlook The company announced the following
targets:
- Adjusted EBITDA profitability in FY 2023; >+2% Adjusted
EBITDA in 2024
- 500,000 Customers in 2024
- Positive operating cash flow in 2024
- Long-term variable margin around 40%, and PTG&A around 20%
of revenue
The outlook and targets in this press release, reflect
assumptions regarding the company’s business, including the
anticipated consistent benefit to the company’s business from the
execution and acceleration of the company’s strategic growth
initiatives, and the impact of the planned use of proceeds from the
equity capital raises the company completed November 2021, February
2022 and April 2022, and the expected proceeds from a $20 million
equity commitment, as well as the cash impact of certain marketing
contracts, to increase investments in marketing and technology
initiatives and infrastructure, as well as continued operational
improvements. The outlook and targets also assumes that the company
will not experience any unforeseen significant disruptions in its
fulfillment operations or supply chain.
Investor Day Replay To watch a replay of the investor
day, please visit the company’s investor relations website:
https://investors.blueapron.com/events-and-presentations
About Blue Apron Blue Apron’s vision is Better Living
Through Better Food™. Launched in 2012, Blue Apron offers fresh,
chef-designed recipes that empower home cooks to embrace their
culinary curiosity and challenge their abilities to see what a
difference cooking quality food can make in their lives. Through
its mission to spark discovery, connection and joy through cooking,
Blue Apron continuously focuses on bringing incredible recipes to
its customers, while minimizing its carbon footprint, reducing food
waste, and promoting diversity and inclusion.
Forward-Looking Statements This press release includes
statements concerning Blue Apron Holdings, Inc. and its future
expectations, plans and prospects that constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. For this purpose, any statements contained
herein that are not statements of historical fact may be deemed to
be forward-looking statements. In some cases, you can identify
forward-looking statements by terms such as "may," "should,"
"expects," "plans," “forecasts,” "anticipates," "could," "intends,"
"target," "projects," "contemplates," "believes," "estimates,"
"predicts," "potential," or "continue," or the negative of these
terms or other similar expressions. The forward-looking statements
in this press release are only predictions. Blue Apron has based
these forward-looking statements largely on its current
expectations and projections about future events and financial
trends that it believes may affect its business, financial
condition and results of operations. These forward-looking
statements speak only as of the date of this press release and are
subject to a number of risks, uncertainties and assumptions
including, without limitation, the company’s ability, including the
timing and extent, to successfully support the acceleration and
execution of its growth strategy and to meet its outlook forecasts
(including the ability to successfully increase marketing and
technology improvements on the planned timeline), cost-effectively
attract new customers and retain existing customers, including its
ability to sustain any increase in demand resulting from both its
growth strategy and the COVID-19 pandemic, and its ability to
continue to expand its product offerings and distribution channels,
and to continue to execute operational efficiency practices;
changes in consumer behaviors, tastes and preferences that could
lead to changes in demand, including as a result of, among other
things the impact of inflation or other macroeconomic factors, and
to some extent, long-term impacts of COVID-19 on consumer behavior,
on consumer spending habits; the company’s ability to attract and
retain qualified employees and personnel in sufficient numbers,
both generally and in light of nationwide labor shortages as a
result of COVID-19 or otherwise; any material and adverse impact of
the COVID-19 pandemic or any future surges, including as a result
of new variants and subvariants of the virus, on the company’s
operations and results, such as challenges in employee recruiting
and retention, any prolonged closures, or series of temporary
closures, of one or both of its fulfillment centers, supply chain
or carrier interruptions or delays, and any resulting need to
cancel or shift customer orders; the company’s expectations
regarding its expenses and net revenue, including the impact of its
recent price increase for our meal kit and wine products, its
increased marketing expenditures, and its ability to grow revenue
and adjusted EBITDA and to achieve or maintain profitability; the
company’s expectations regarding, and the stability of, its supply
chain, including potential shortages, interruptions and/or
increased costs in the supply or delivery of ingredients, and
parcel and freight carrier interruptions or delays and/or higher
freight or fuel costs, as a result of inflation or otherwise; the
company’s ability to effectively compete; the company’s ability to
maintain and grow the value of its brand and reputation; the
company’s ability to achieve its environmental, sustainability and
corporate governance goals in its anticipated timeframe or at all;
the company’s ability to maintain food safety and prevent
food-borne illness incidents and its susceptibility to
supplier-initiated recalls; the company’s ability, including the
timing and extent, to sufficiently manage costs and to fund
investments in its operations in amounts necessary to maintain
compliance with financial, and other covenants under its
indebtedness while continuing to support the execution and
acceleration of its growth strategy; the company’s ability to
comply with modified or new laws and regulations applying to its
business, or the impact that such compliance may have on its
business; the company’s vulnerability to adverse weather
conditions, natural disasters, wars, and public health crises,
including pandemics; the company’s ability to protect the security
and integrity of its data and protect against data security risks
and breaches; the company’s ability to obtain and maintain
intellectual property protection; and other risks more fully
described in the company’s Annual Report on Form 10-K for the year
ended December 31, 2021 filed with the SEC on February 25, 2022 and
the company’s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2022 filed with the SEC on May 9, 2022 and in other
filings that the company may make with the SEC in the future. The
company assumes no obligation to update any forward-looking
statements contained in this press release, whether as a result of
any new information, future events, or otherwise.
Use of Non-GAAP Financial Information This press release
includes non-GAAP financial measures, adjusted EBITDA and free cash
flow, that are not prepared in accordance with, nor an alternative
to, financial measures prepared in accordance with U.S. generally
accepted accounting principles (“GAAP”). In addition, these
non-GAAP financial measures are not based on any standardized
methodology prescribed by GAAP and are not necessarily comparable
to similarly-titled measures presented by other companies.
The company defines adjusted EBITDA as net earnings (loss)
before interest income (expense), net, other operating expense,
gain (loss) on extinguishment of debt, other income (expense) net,
benefit (provision) for income taxes and depreciation and
amortization, adjusted to eliminate share-based compensation
expense. The company presents adjusted EBITDA because it is a key
measure used by the company’s management and board of directors to
understand and evaluate the company’s operating performance,
generate future operating plans and make strategic decisions
regarding the allocation of capital. In particular, the company
believes that the exclusion of certain items in calculating
adjusted EBITDA can produce a useful measure for period-to-period
comparisons of the company’s business. Further, Blue Apron uses
adjusted EBITDA to evaluate its operating performance and trends
and make planning decisions, and it believes that adjusted EBITDA
helps identify underlying trends in its business that could
otherwise be masked by the effect of the items that the company
excludes. Accordingly, Blue Apron believes that adjusted EBITDA
provides useful information to investors and others in
understanding and evaluating its operating results, enhancing the
overall understanding of the company’s past performance and future
prospects, and allowing for greater transparency with respect to
key financial metrics used by its management in its financial and
operational decision-making.
There are a number of limitations related to the use of adjusted
EBITDA rather than net income (loss), which is the most directly
comparable GAAP equivalent. Some of these limitations are:
- adjusted EBITDA excludes share-based compensation expense, as
share-based compensation expense has recently been, and will
continue to be for the foreseeable future, a significant recurring
expense for the company’s business and an important part of its
compensation strategy;
- adjusted EBITDA excludes depreciation and amortization expense
and, although these are non-cash expenses, the assets being
depreciated may have to be replaced in the future;
- adjusted EBITDA excludes other operating expense, as other
operating expense represents non-cash impairment charges on
long-lived assets, a non-cash gain, net of termination fee, on
lease termination, and restructuring costs;
- adjusted EBITDA excludes loss on extinguishment of debt as this
represents a non-cash charge;
- adjusted EBITDA does not reflect other (income) expense net, as
this represents changes in the fair value of the
liability-classified warrant obligation as of each reporting
period;
- adjusted EBITDA does not reflect interest expense, or the cash
requirements necessary to service interest, which reduces cash
available to us;
- adjusted EBITDA does not reflect income tax payments that
reduce cash available to us; and
- other companies, including companies in the company’s industry,
may calculate adjusted EBITDA differently, which reduces its
usefulness as a comparative measure.
The company defines free cash flow as net cash from (used in)
operating activities less purchases of property and equipment. The
company presents free cash flow because it is used by the company’s
management and board of directors as an indicator of the amount of
cash the company generates or uses and to evaluate the company’s
ability to satisfy current and future obligations and to fund
future business opportunities. Accordingly, Blue Apron believes
that free cash flow provides useful information to investors and
others in understanding and evaluating its operating results,
enhancing the overall understanding of the company’s ability to
satisfy its financial obligations and pursue business
opportunities, and allowing for greater transparency with respect
to a key financial metric used by its management in its financial
and operational decision making.
There are a number of limitations related to the use of free
cash flow rather than net cash from (used in) operating activities,
which is the most directly comparable GAAP equivalent. Some of
these limitations are:
- free cash flow is not a measure of cash available for
discretionary expenditures since the company has certain
non-discretionary obligations such as debt repayments or capital
lease obligations that are not deducted from the measure; and
- other companies, including companies in the company’s industry,
may calculate free cash flow differently, which reduces its
usefulness as a comparative measure.
Because of these limitations, adjusted EBITDA and free cash flow
should be considered together with other financial information
presented in accordance with GAAP.
Use of Certain Customer Metrics This press release
references the number of the company’s “Customers”, which is a key
metric that the company uses to evaluate its business and
operations, measure its performance, identify trends affecting its
business, project its future performance, and make strategic
decisions. You should read references to Customers in conjunction
with the company’s financial statements. The company defines and
determines Customers as follows:
Customers The company determines its number of Customers by
counting the total number of individual customers who have paid for
at least one Order from Blue Apron across the company’s meal, wine
or market products sold on its e-commerce platforms in a given
reporting period.
Orders The company defines Orders as the number of paid orders
by Customers across the company’s meal, wine and market products
sold on its e-commerce platforms in any reporting period, inclusive
of orders that may have eventually been refunded or credited to
customers.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220511005684/en/
Media Contact Muriel Lussier Blue Apron
muriel.lussier@blueapron.com
Investor Contact Tip Fleming Blue Apron
investor.relations@blueapron.com
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