Blue Apron (NYSE:APRN) stock rose more than 10% this morning after the company announced that it will begin selling meals on Amazon (NASDAQ:AMZN). Interested customers can purchase meals via Amazon without a subscription. This move comes as the meal kit company seeks to expand its network to drive growth through multiple outlets.
Chief Product Officer Josh Friedman added the following about the development:
“Our customers regularly tell us how much they love our meals. By offering a selection of products in the U.S. Amazon store, we are able to provide Amazon customers the opportunity to buy a range of chef-curated meals that will arrive quickly to their door.”
An assortment of meals will be available on the e-commerce website. These include quick Heat & Eat meals, Family Favorites recipes and special holiday occasion boxes.
APRN Stock: Blue Apron Lists Products on Amazon
These two companies have previously collaborated, providing Amazon’s Alexa with meal recipe functionality. With Amazon being the United States’ largest e-commerce website, however, Blue Apron can expect to receive a boost in revenue from this latest collab. Any of the meals ordered on Amazon will still be fulfilled by Blue Apron, which will take advantage of Amazon’s “strong supply chain and its ability to ship boxes the next business day.”
While this news is undoubtedly a positive catalyst, APRN stock has still received its fair share of volatility this year. Earlier this month, the company announced an up to $15 million at-the-market (ATM) offering of Class A common stock. The equity distribution agreement was made in accordance with Canaccord Genuity, which will be “entitled to a 3% commission of the gross price of shares sold.”
That’s not all. Before that news, Blue Apron CFO Randy Greben also announced that he will step down to pursue business opportunities at another company, effective Oct. 17. Moving forward, Mitchell Cohen will step up as interim CFO while Blue Apron searches for a permanent replacement.
Blue Apron’s Q3 Estimates
For the third quarter, Blue Apron’s revenue is expected to be between $109 million and $112 million. That sales estimate was lowered from previous guidance for between $125 million to $131 million. Blue Apron lowered its revenue estimate after a large enterprise customer shifted their bulk order from Q3 to Q4. That same customer is now expected to contribute $30 million in Q4 and may also increase the value of its order. However, the large order attributed to a single customer raises a concern about customer concentration.
As of the end of September, Blue Apron had $32.1 million of cash and cash equivalents and total debt of $27.4 million.
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On the date of publication, Eddie Pan held a long position in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
