Blue Apron Holdings, Inc. (NYSE:APRN) Q2 2020 Earnings Conference Call - Final Transcript

Jul 29, 2020 • 08:30 am ET

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Blue Apron Holdings, Inc. (NYSE:APRN) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions] Our first question today comes from Maria Ripps from Canaccord.

Analyst
Maria Ripps

Good morning, and congrats on a strong set of numbers.

Executive
Tim Bensley

Thanks, Maria.

Executive
Linda Findley Kozlowski

Thank you, Maria.

Analyst
Maria Ripps

Is there any way to break out how much of this strength in the quarter was due to COVID versus your product and marketing efforts? And I know it may be a difficult question to answer, but is there anything in the marketing funnel that sort of gives you any clues? And do you know the comment on whether reduced churn had a significant impact on customer growth, or was it mostly about gross adds?

Executive
Linda Findley Kozlowski

Tim, do you want to start and then I can follow up?

Executive
Tim Bensley

Yes, absolutely. There's no doubt that a decent portion of the net revenue growth in the quarter was driven by the consumer behaviors resulting from the pandemic. But we're also pretty confident that a good part of it was due to our growth plan. And for a couple of examples, in Q1, we were already seeing really good improvement in our customer metrics, and saw that sequential quarter-over-quarter revenue growth. So we're already kind of headed in a good direction. Obviously, that got accelerated and we got back to year-over-year growth sooner than expected in Q2 with some help from the change in consumer behavior. But we're also still fairly confident that some portion of that was driven -- or a good portion of that was driven by our growth initiatives.

A good example is -- and one of the things that Linda talked about -- was we had a very successful piece of innovation in the first quarter called Premium, where we offer this product that has an enhanced kind of experience at a higher price point. And that alone continued over -- contributed over a third of the 5% year-over-year increase in average order value. So we know that things like Premium are actually helping to drive the metrics that are driving the overall revenue. Beyond that, to try to sort of parse out exactly how much of it was driven by changes in consumer behavior from the pandemic versus the other things that we're doing, it's hard to say.

But probably the other part -- and this is also something that Linda and I both talked about -- is even as we see changes in consumer behavior that we assume are partly being driven by the COVID pandemic, we also see indications that some of those consumer behaviors are going to be sticky. And so as we move forward, we're pretty confident that the growth initiatives and the strategy that Linda laid out, and that we've been executing since late Q4 of last year, will be what we need to basically support the consumer demand and drive growth going forward.

Executive
Linda Findley Kozlowski

Yes, just to follow on with that, we don't specifically talk about our churn numbers publicly. But what we can say is that a lot of what we've seen from the traction is both