In an interview with CNBC on Thursday, Matthew Salzberg, Blue Apron CEO, details why he is still very optimistic about the company’s direction despite suffering from another lackluster quarterly earnings results.
Although the company beat revenues in its recent quarterly earnings release, management noted that delays in their new facility in Linden, New Jersey, would heavily affect earnings in the second half of the year. These mixed results plummeted their stock by more than 15% by mid-morning of the following trading session.
After Amazon’s acquisition of Whole Foods caused heavy uncertainty for the future of Blue Apron (NYSE:$APRN), this recent shortcoming is another setback for the company, as shares have since dipped below its IPO price of $10.
However, CEO Matthew Salzberg doesn’t see the grocery market as a “winner-take-all” battle between Blue Apron and Amazon. Salzberg explains that Blue Apron’s proprietary products, such as the beef from their own farms, are enough to differentiate the company from competitors.
“We admire Amazon as a company, and we take them seriously, big or small,” Salzberg said. “That being said, we are competing in a competitive and large market. … We think about ourselves very differently, I think than Amazon thinks about themselves.”
As wages and labor costs rise, Blue Apron has also struggled to consistently grow its customer base, leading to a greater quarterly loss than Wall Street expected. Although these issues are unable to be immediately rectified, the company is looking to improve margins by shifting resources to the New Jersey facility for better distribution and tighten marketing expenses as well.
“Marketing isn’t the only part of the picture,” Salzberg explained. “Our business has an opportunity to grow just by monetizing existing [users] and serving those customers better by selling them more products.”
With plans to close a facility in Jersey City this coming fall, Blue Apron says it will allow employees the option to transfer to nearby locations. However, Blue Apron anticipates that 30%, or up to 470 workers, from the Jersey City plant, won’t make the adjustment. Additionally, Co-founder and Chief Operating Officer Matthew Wadiak announced his transition to a senior advisory role back in July.
“We created a new team that didn’t exist before — a consumer products team — which changed how we divide responsibilities among the management team at the company,” Salzberg explained. “We also reorganized the way our product management and product marketing functions work in order to focus not just on acquisitions but also on customer monetization as well.”
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