Blue Apron CEO Sees Fewer Customers as Focus Shifts to Top Users

(Bloomberg) -- Blue Apron Holdings Inc., following a year where the stock price dropped 80 percent to trade below $1, aims to turn things around in 2019 by focusing on its biggest fans.

The at-home meal-kit company is targeting what it calls its “best customers” in a move to stabilize its revenue trends by the end of next year, Chief Executive Officer Bradley Dickerson said in a phone interview.

“The most likely thing to happen in the near term is less customers, because we’re focused on high-affinity customers only, but the engagement would be higher,” he said. “So you’ll see less customers, but a higher revenue per customer as we work forward through the year.” Such “high-affinity” customers tend to order more and are profitable for the company, he said.

With this kind of focus, Dickerson added, “we should be able to get to a point, hopefully towards the end of the year, where we stabilize that revenue base and start to get into a growth mode again.”

Blue Apron CEO Sees Fewer Customers as Focus Shifts to Top Users

Dickerson said Blue Apron doesn’t have a target for subscribers. The company had about 646,000 in the third quarter, down 10 percent on a sequential basis. The company also doesn’t have a specific time frame for revenue stabilization or for achieving profitability on a net-income basis. Dickerson reiterated an expectation that the company will be profitable before income tax, depreciation and amortization starting in the first quarter of 2019.

Morgan Stanley analyst Brian Nowak said in November that “declining revenue on an already subscale business makes it even harder for us to envision a pathway to positive profits.”

Such issues have weighed on the the stock since it went public in June 2017. It’s one of the worst-performing initial public offerings of the decade. The shares rose less than 1 percent Thursday -- a fraction of a penny -- to around 79 cents.

Dickerson said that “the best thing we can do for the share price is to have a clear strategy” and execute on it, and that “if we can do that, the share price should take care of itself.”

Among those strategic initiatives are collaborations with other companies. Blue Apron earlier on Thursday released more details about a previously announced partnership with WW, formerly known as Weight Watchers.

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