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Blue Apron to end Jet.com partnership

Blue Apron Holdings Inc. will end its partnership with Walmart Inc.'s Jet.com in the coming weeks as the meal-kit maker attempts to achieve profitability by refocusing on its direct-to-consumer business.

The same- and next-day delivery pilot was first announced in October 2018. It gave the company experience providing its kits on-demand through a retailer instead of shipping them to customers at the set intervals, President and CEO Linda Kozlowski told analysts during the company's fiscal second-quarter earnings call.

"Right now, however, we need to focus our efforts on our core business," Kozlowski said.

Ending the Jet.com partnership is among the first public actions for Kozlowski, who took over as CEO in April. Since going public in 2017, the meal-kit company has rejiggered its strategy. It is focusing on a smaller base of customers who spend more instead of on a wider base who are less loyal to the brand.

As part of that effort, Kozlowski said Blue Apron is revamping elements of its direct-to-consumer offering, giving customers the ability to swap out side dishes, such as trading carbs for an extra serving of vegetables, as well as featuring more specialty ingredients, such as Chinese broccoli and Beyond Meat Inc.'s plant-based meats.

"We have not kept up with the ever-evolving needs and preferences of our customers over the past couple of years, and we are behind," she said.

Targeting such consumers — and achieving profitability — does not mean eschewing all partnerships, Kozlowski told analysts. She highlighted Blue Apron's existing agreement with WW, formerly known as Weight Watchers International Inc. Kozlowski said the partnership attracts customers who are profitable, and the company sees an opportunity to work with "a variety of both health- and fitness-oriented organizations."

The New York-based company narrowed its net loss to $7.7 million year over year from $32.8 million. On a diluted per-share basis, the loss was 59 cents, beating the S&P Global Market Intelligence mean consensus estimate for a loss of $1.08.

Net revenue fell 34% to $119.2 million during the three months to June 30 as Blue Apron's customer count declined 37% to 449,000 and order numbers slid 34%. The average value of each order as well as the number of orders per customer both rose slightly.

Blue Apron expects a net loss of between $55 million and $62 million and adjusted EBITDA of between breakeven and a loss of $7 million, CFO and Treasurer Timothy Bensley told analysts.

The company reported its second-quarter results before U.S. markets opened Aug. 6.

Shares of Blue Apron were down 2.43% to $7.64 in afternoon trading.