Blue Apron Holdings Inc. says customers are eating up the Heat & Eat meals the company launched in September, driving a record average order value (AOV) for the third quarter.
“Our focus on providing increased variety and flexibility to our customers through the continued roll out of product innovations, including Heat & Eat, our first-ever prepared, single-serving meal, has proven to be successful, as evident in the growth of our Average Order Value (AOV) to a third quarter record of $62.30,” said Chief Executive Linda Findley in an earnings statement.
AOV rose from $58.56 last year, and was up from $57.60 in 2019.
Still, Blue Apron
reported a 2% revenue decline to $109.7 million for the quarter, which the company said was primarily due to a decline in orders and customers. The decline along with wider-than-expected losses sent shares down 14% in Tuesday premarket trading, but declines eased to 0.5% during the trading day.
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The Heat & Eat meals can be prepared in the microwave and are based on the company’s signature dishes.
In addition to changes in the menu lineup, Blue Apron also made pricing changes during the quarter, adding shipping charges and making the price of plans more consistent and competitive.
“Importantly, with the pricing roll out, we continue to see strong engagement from customers and a negligible impact on churn,” Findley said on the earnings call, according to a FactSet transcript.
Blue Apron recently raised $78 million in capital that it plans to use for marketing, which the company expects will drive “at least mid-teens percentage year over year net revenue growth,” the earnings release said.
Blue Apron stock has rallied 50.6% for the year to date while the S&P 500 index
has gained 24.7% for the period.