The Real Reason Blue Apron Pulled Back on Marketing
Blue Apron (NYSE: APRN) had said it would start pulling back on its marketing spend this year, following a rapid ramp-up in expenses and customer acquisition costs. Pull back it did. Marketing spend fell to $34.5 million in the second quarter, down from $60.6 million in the first quarter.
Blue Apron said the pullback was necessary so that its spend would be more in line with the seasonality of its business, which is typically strongest in the first quarter.
However, there is a more troubling reason. The company revealed during its second-quarter earnings call that it is facing a logistical nightmare getting its Linden, New Jersey, fulfillment center up and running. The problems caused a decrease of on-time, in-full deliveries -- that is, customers received packages late or with the wrong items -- and increased the cost of sales for Blue Apron's meal kits.
Source: Fool.com
