Q3 2020 Blue Apron Holdings, Inc. Earnings Call
Well good morning, and welcome to the Blue apron, holding that's caught off 2020, <unk> coking coal Oh My God.
I think hi, Oh participate.
I mean my age.
As a reminder, this call is being recorded today, they say Oh type of 29 2020 for replay purposes.
A slide presentation I think created to accompany today's remarks, it can be accessed on the blue apron Investor Relations website.
Okay as of today and should know favorite light upon as representing excuse as if any subsequent date.
The company, specifically disclaims any obligation to update these statements.
During this cold the company will be referring to non-GAAP measures, which enough a pet in a corner.
Generally accepted accounting principles.
You are encouraged to the to the animals are nobodies and the SMC filings where.
Where it has defined these message interviewed the reconciliation of these non-GAAP financial measures to the my survey quick comparable gap measures.
In addition, reconciliations a certain forward looking non-GAAP measures.
Two during the school is included in your family's which is available on the company's Investor relations websites located in Besser supplement aprons Dot com.
Events and presentations.
With that I would like to turn Nicole I bought to Linda suddenly cause I'll sing.
C Alright, Linda Please go ahead.
Thank you is a good morning, everyone and thank you for joining us today.
Before diving into our third quarter results I want to acknowledge the ongoing impact the pandemic has on daily life and the health of our employees customers and the communities, where we operate their safety remains our top priority.
Since we spoke with you last July.
Our second quarter conference call things have been very active for blue apron. We've.
We continued to see strong demand for a meal kids is third quarter revenue grew 13% year over year.
As Tim will discuss in a few minutes top line growth was adversely impacted by approximately $2 million a customer credits for boxes related to a voluntary supplier recall opinions.
Given that the third and fourth quarters have historically been our seasonally slowest quarters and that we've continued to face certain challenges with labour availability. It's notable that are year over year net revenue growth in Q3 was at a higher rate compared to year over year net revenue growth in queue too.
We also expect an improvement of year over year net revenue growth and similar rate for the fourth quarter as we saw in the third quarter.
The top line year over year growth combined with our continued focus on costs and cash management led to adjusted EBITDA lost a net loss coming in significantly better than our guidance targets.
In addition, while we generally face seasonal influences in the third quarter of each year, which drive higher packaging and shipping costs are variable margins improved compared to the same period last year, even as we added operational complexities by introducing new product offerings and made investments in incremental hourly wages in attendance bonuses for fulfillment center workforce.
Since the end of the second quarter, we've strengthened our balance sheet and provided financial flexibility with the underwritten public offering a 4 million shares of our class a common stock in August resulting in approximately $32.9 million of net proceeds and a new $35 million to in your secured term loan funded two weeks ago.
Which effectively extends our debt maturity until March of 2023.
Reflecting this financial flexibility as well as the benefits from our growth initiatives and the positive impact on demand from COVID-19 pandemic the.
The Board recently concluded our strategic review process that had been undertaken earlier this year we.
We believe we are now in a better position to continue to execute on our growth plan.
The year over year components improvements that we've seen generated since our growth strategies began to take hold in late 2019, coupled with the continued heightened consumer demand stemming from the pandemic measured on a year over year basis has been notable.
I'll add that are operating plans with also helps us address the increased demand that there are still more operational efficiencies to be gained.
Against this backdrop consumers have continued to show an increasing preference for quality recipes and food as they cook at home more frequently.
We continue to believe that these changes in consumer behaviors will carry on to some extent even after the pandemic ends.
In addition, we believe that are strengthened balance sheet will enable just enable us to further improve our competitive position in the marketplace as we look to attract engage and retain more customers.
Turning now to some highlights from the third quarter.
Despite a decline in customers this quarter, partially due to labor constraints. The progress we have made against our growth plan. It can be seen in the year over year improvements and other key customer metrics.
These metrics include orders per customer average order value, an average revenue per customer, which for the second quarter in a row was about $300 representing only the second time since 2015, we've achieved this level.
The year over year growth, we achieved in the third quarter of 2020 as well as our expectations for continued year over year growth. This quarter is a reflection of the significant improvements we continue to make against customer engagement retention as well as the results of the changes we have seen a consumer behavior related to the pandemic.
We continue to evolve our product with quicker prep times and menu options that can adapt to more lifestyles. We also continue to benefit from our premium offerings, which expanded to include new proteins like dark which was the most purchase premium recipe in the third quarter.
Our premium offering features advanced cooking techniques and more ingredient variety.
He's often only recipes continue to be popular with our customers on average 70% of premium orders each week Ah repeat premium orders.
In addition, these recipes contributed to approximately 29.5% of the year over year increase in average order value in Q3.
Continuing to provide more product variety flexibility and choice is another critical part of our growth strategy.
We recently launched a number of new product expansions that make it more convenient for customers to receive additional meals every week now all of our customers on our T. P signature menu can order a fourth meal to help remove stress around menu prep or added trips to the grocery store.
Customers can also order multiple boxes per week, providing for greater flexibility in weekly menu planning.
This offering allows our customers to get two boxes per week by selecting up to eight different recipes per week. It staggered times doubling recipes to serve up to eight people per meal on the four P signature menu or even balancing out there cooking by getting a meal prep box for lunches and quit dinners alongside a signal to your box for more elevated in premium meals.
The multiple boxes precycle offering also applies for a wind subscription service, which has continued to seasick strength this year.
We also launched a staggered rollout of customization for select recipes on our two P and for peace ticket your menus.
Customization options include things such as the ability to upgrade your protein for a more premium protein replace a meet with a plant protein swap and vegetable for a starch or increased portion size by adding more proteins cards or vegetables.
This feature is being rolled out by percentage of audiences and we expect it to be available to all customers by the end of the year.
Our chef partnerships remain a key contributor to our customer engagement strategy as we continue to focus on adding flexibility in discovery to our menus.
These recipes have proven to be popular and our customers seek them is another way to get more of what they know and love from Blue apron unique recipes that feature seasonal and premium ingredients.
We recently concluded a successful six week partnership with <unk> T V personality, Amanda Fry Tag and earlier this week, we announced our newest partnership with chef Eduardo Georgia.
Through this recent collaboration we also created our first ever full Thanksgiving nail offering to help home cooks easily navigate their holiday menu as we know they may be playing a different role in their kitchen. This season.
Well, adding variety to write menus has helped drive customer engagement and average order value we've.
We've had to continue to balance, adding variety and options as well as more marketing with our ability to adequately staff our fulfillment centers.
As it does for other companies adequately staffing our facilities remains a challenge and as such we did not lean into marketing in the third quarter to drive higher growth as much as the otherwise would have.
To be clear, while we believe we have the infrastructure in place to support significantly higher levels of demand, we have experienced labor shortages throughout the pandemic.
Because of this in the third quarter, we continued to implement actions first introduced in the second quarter, including canceling or delaying some orders closing some weekly offerings cycles and discontinuing a subset of menu offerings. In addition to managing our marketing programs.
To address some of the labor challenges, we are implementing several new operating practices using six sigma to improve productivity across our facilities.
We're just in key factors that in effect increased line speed, an overall labor utilization. These practices include ensuring a better packing process across lines adjusting distribution of labor and better use of our equipment.
As a result, where we have implemented improvements over the last two months, we've effectively decrease the labor required pack per line by approximately 18% and labor minutes per box was lowered by nearly 22%.
We're planning to use the fourth quarter to continue implementing additional optimizations across both of our fulfillment centers, which we believe will position the company to more effectively addressed demand, enabling us to continue to maintain to strengthen our underlying customer metrics and dragged increases in customers and revenues forecasted for the first quarter.
With regard to our supply chain availability and safety, we have not experienced any significant disruption over the last seven months.
Related to the pandemic.
In fact, we've been able to leverage our robust supply chain, a strong supplier network to expand the diversity of ingredients available to create our weekly menus. This is allowed us to include exciting new items for a premium offering, including duck and Lam and support our new customization options.
As I wrap up I think it's important to note that are three part return to growth plan has continued to deliver.
While it's true that the year over year improvement in our key customer metrics. The last two quarters reflects increased demand, we believe that without the benefit from a growth initiatives cost discipline and returned focus marketing programs. We would not have been in a position to turn that demand <unk> improved operating results at the level of sweets delivered.
In addition, as we implement the next phase of our growth strategy. We also appointed for New Board directors at the end of the third quarter with proven expertise in ecommerce marketing direct to consumer digital media operations and finance.
We expect to benefit from their refresh sports skill mix and record of success as we continue to execute on a strategic priorities.
Because financial flexibility afforded to us from a recent equity and equity offering in debt refinancing as well as our ongoing execution of our growth strategies. We believe that blue apron is positioned to drive and can continue to improve operational performance.
As always we appreciate our long standing customers as well as those who was recently turned a blue apron.
You take seriously our commitment to provide every customer that invites us into their homes with a quality meal experience and a world class service ever.
Every day, we seek to improve that so we can retain our customers and attractive new ones.
Finally, I'd like to thank our dedicated employees, who have continued to step up to deliver more food to more people.
We're taking heightened precautions to ensure their wellbeing, particularly insider fulfillment centers by continuing to enhance personal hygiene employee safety and sanitation standards.
I will now turn it over to tend to talk about our financial into more detail.
Thank you Linda good morning, everyone.
Comment. This morning will include a review of our third quarter performance as well as some color on the equity raised in debt refinancing that we completed over the last few months.
These documents have strengthened our balance sheet by providing us with financial flexibility to help us continue to execute a growth strategy.
Before that I also want to express my highest level of appreciation for all of our team members, who continue to step up and execute each day.
Is highlighted in this morning's press release airmen when was opening comments a result of the third quarter or ahead of the guidance provided in late July as menu, where the third quarter has historically been or seasonally weakest quarter as we typically see fewer meals being ordered during the summer months and also see an impact from higher costs for <unk>.
Package, even shipping through the hotter weather.
For this reason to assessor performance, we focus on a comparison to the year ago period.
When you look at the year over your comparison, it's clear that we are continuing to move the ball forward with regards to a return to growth strategies.
That rather than the third quarter of 2020, 13% you over here $112 $3 million.
Revenue as well as some of the key customer metrics or are you in a moment reflect the adverse impact of customer credits issued related to a voluntary supplier recall of onions in August.
These credits amounted to approximately $2 million and we're sticking to recover the cost of the recall.
Even without adding back to $2 million in customer of credits are you over your revenue growth accelerated from the 10% you'll be your both recorded and the 2022nd quarter.
Driving this revenue growth was the benefit of a more expansive menu offerings as well as the increased demand from your kids as a result of changes in consumer behavior that we believe continue to solidify around cooking at home more frequently.
Even the net revenue and adjusted EBITDA last performance with logical to ask if there was an opportunity in the quarter clean order into marketing to drive more demand.
The address to address that I'll highlight but while we have the equipment facility supply chain and food safety protocols in place to support higher demand adequate labor availability remains a challenge caused in part by a portion of our labor Board based reductions in public transportation and or child care arrangements. However, when did this.
We're also working to improve operational efficiencies to reduce labor needs.
We also continue to actively manage our marketing spend levels to insure their balance with our ability to staff work with Goldman centers with adequate labor to support that the man.
That said, we moderated our marketing effort from the third quarter to help Meredith fulfillment center capacity marketing spend in the third quarter of 2020 was down in both absolute dollars and it was a percentage of that revenue from $12.1 million and the priority or to $10.9 million and from 12.2% as for centuries net revenue.
To $9 seven per cent.
That'd be demonstrated for the last several quarters, our strategic focus on customer engagement and retention has made our marketing spend more efficient and we're getting a better return on our investment we had 357000 customers in the third quarter of 2020 compared to 396000 in the second quarter, representing normal seasonal influence.
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For the second consecutive quarter orders for customer or five four representing our highest level since prior to 2015, and a 20% increase year over year.
Average order value was also $59 compared to $58 in the third quarter of 2019.
Add back the cost of the recall credits average order value in the quarter was $60.
Inclusive of the $2 million would be called credits average revenue per customer was more than $300 for the second consecutive quarter rising 22% year over year to $314.
Excluding the recall credit third quarter average revenue per customer was $320. The last two quarters have been the only time Blue apron has recorded average revenue per customer more than $300 since prior to 2015.
On the cost side Cogs, excluding depreciation and amortization as a percentage of net revenue decline year over year by 130 basis points to 66.4%.
A variable margin with 33.6% in Q3 of 2020 compared to 32.3% in Q3 of 2019.
The improvement in college, and durable margin as a percentage of net revenue largely reflects our continued focused on cost efficiency, which more than offset frontline wage in attendance bonus investments made in a fulfillment centers during the pandemic.
Our focus on cost discipline is also evident and product technology, and G&A costs or a P. P G and E, which declined 5% year over year, the $33.7 million and 550 basis points to 30% as a percent of net revenue.
It's also reflects the four quarters benefit from the closing of the Arlington facility in May.
Other operating expense for the third quarter was $1.1 million for a charge relating to an estimated non-recurring legal settlement.
On the bottom line reported a net loss of $15.3 million, which compares favorably toward guidance, where I met lots of no more than $18 million.
Our adjusted EBITDA, Los improve 64% year over year to $4.7 million and we recorded negative operating cash flow and free cash flow of seven $1 million and $9.1 million respectively.
Both of these metrics demonstrate improvements from last year third quarter.
In August we completed and underwritten public offering a 4 million shares of our class a common stock which resulted in net proceeds after underwriting discount be condition and cost of $32.9 million.
As required under the terms of a revolving credit facility at the time, we utilize approximately one third of the proceeds or $10.8 million to pay down a revolver.
Reflecting those actions when the third quarter with 58 $7 million of cash and cash equivalents.
Subsequent to the end of the third quarter, we entered into a new 35 million dollar term loan, but mature as in March 2023, and utilize the proceeds from the term loan in cash on hand to repay and for all of the outstanding indebtedness either revolving credit facility.
At 40 room and get refinancing combined with a recent improve performance have served to strengthen our balance sheet and improve financial flexibility.
As such we are confident that we have the necessary capital resources to continue to execute are both man and we believe the blue apron is now and the founder competitive position.
Turning to our financial outlook, let me preface or queue for guidance by sharing some assumptions.
Our guidance as soon as both the consistent benefit to our business from the execution of our strategic growth initiatives, an ongoing operational improvements.
The company's ability in the fourth quarter to recognize recovery of up to $2 million of customer credit issued for the onion recall as.
As well as continued higher higher levels of the man from changes in consumer behavior.
Further our guidance assume that we will not experienced any significant disruptions in our fulfillment center operations, our supply chain as a result of the pandemic or otherwise.
Reflecting the fact with an assumption we are expecting fourthquarter net revenue growth of approximately 15% to 19% year over year to $108 million to $112 million third consecutive quarter of double digit year over year growth in revenue.
Expect to incur a net loss of not more than $15 million in the fourth quarter, and then adjusted EBITDA loss of not more than $5 million.
Looking a little further ahead with operational improvements in our fulfillment centers that we expect to continue to help address labor challenges, we intend to increase our first quarter 2021, 2021 marketing expenditures, which we believe will help drive year over year double digit net revenue growth and a year over year increase in customers for that period.
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For easy reference R. A reconciliation table from her net loss with adjusted EBITDA included on our earnings release, which has been posted on boyfriends Investor Relations website Linda.
And then I will now take your questions.
Thank you.
We will now be getting the question and answer session.
To ask a question. Please press I think one on you're fine.
If you're asking.
A question buyers speaker fine please pick up the handset before pressing the case.
She would show your question. Please Cresta then K.
I will now pose briefly.
Your first question today comes from Maria Rich It kind of code. Please go ahead.
Good morning, and thank you for taking my questions. So you basically had a very strong customer engagement and spend poor customer in the corner by the King maybe talk a little bit more about a subscriber declines this corner.
Was it a matter of slower gross additions, Ohio disconnect kind of what can you share with us on that and when you're customers leave the platform. How much do you know about why they leave and was it any different this quarter. Besides that labor constraints issues that you mentioned.
Thanks, Maria I can jumping on that question first and then 10 sales created jumpin after.
But but from a customer standpoint, we actually saw a very similar trends change some of what we saw it from our peer set as far as flat or year over year, partially seasonally but then from the labor constraint perspective, it's really related to when we have to closest cycle because of high demand. So obviously when we closed the cycle we do modern.
Our marketing around that in order to avoid driving people into cycles that are currently closed. So that's really where we're seeing most of the impact uhm is between those two things so otherwise as far as reasons for customer numbers in the quarter, it's mostly seasonality that we that we see these numbers sort of fluctuate in it.
Consistent with our peers not necessarily something that is different or abnormal from what we've seen in the past in fact, what we are doing is continuing to innovate on our product as we had promised to do to drive additional variety of flexibility and choice. So that customers can in fact in <unk>.
More with the product to meet their lifestyle 10 is there anything you Wanna out there.
No I think that's great the morning, I'm Maria and thanks for the question. Yeah. We you know after a couple of quarters of sequential customer increase in two one and two too I I think what Linda said is exactly right of course that our customer account is typically seasonally a little bit lower in Q3 and again it seems to.
Would be pretty consistent with what we've seen across the category as well.
We still have more customers at this point. Obviously then we ended then we ended 2019, so we're feeling pretty good about that and you know as I talked about as we look for the other important thing is Linda talk quite a bit about all of the operational efficiencies and things that we were doing to basically continue to offset any issues that we're having with.
Labour available in Europe sees and as we do that and all of those initiatives really take full strength across all of our ships both of our facilities as we move through the fourth quarter. We are expecting to have a good you want in terms of customer account and as I as I said in my in my remarks, both an increase.
Sequentially and I would encourage you over here and you wanted to lean lean more heavily into a marketing investment behind that hopefully greater capacity in Arkansas centers.
Got it that that's very helpful and maybe related to unit sort of increase in marketing spending coupon them next year can you give us a little bit more call around that which platform. So channels are you planning on leveraging and is there anything that you anticipating doing differently. This time compared decent Franklin practices ma'am.
Sure I can I can elaborate that on on that a little bit so actually what we've been building over the last several quarters as far as a more robust integrated marketing plan that includes copper funnel all the way through all the way through our include a R. R deeper investment.
And strategically targeting within performance marketing, we've already been implementing a lot of those improvements as we noted in our comments, we have been having to moderate marketing spend based on capacity in order to move the business forward in a healthy way that being said we have seen continued improvements in our efficiencies.
And being able to actually connect marketing across channels more efficiently than in the past. So the mix will continue to expand into the right level of top of subtle span top a funnel spend as Lee lean into that more integrated marketing program and you'll start to see that investment and go across multiple channels, including the ones. We have historically you.
Used including search display and and some of the other influence or advertising that we've done, but we will continue to expand into the top of funnel again in a responsible way there'll be no increases the efficiency of the overall marketing spend.
And maybe one more question if I could generally you introduce multiple product improvement over the past several quarters do you think your menu options now sort of way you want them to be or do you see room for improvement there.
We definitely have that have already set on room for more improvement there as we said multiple times. This is an ongoing process, where do we want to continue to add variety flexibility and choice to our customers. We want to continue to introduce healthier options that don't involve any sacrifice for our you know our our chefs you know they want to have the same level of flavor and <unk>.
Experienced that there used to with blue apron menus, but that have some healthier options that are specific to their dietary needs and and and and lifestyle. So we're definitely continuing on our way with product innovation and we are happy with the progress we've made so far and we love, particularly the new recipe customization.
Opportunity that allows people to even bulk up proteins for families Andorra swap out some of the parts of the meal, if they want to maybe make something more vegetable heavy rather than starch heavy. So those are some really important areas of progress that we've made but we definitely have a lot more opportunity and we definitely see more opportunity.
For customer demand based on that.
That's very helpful. Thank you for the call.
Thank you.
Thank you once again, if you do have a question. Please press star one on your fine.
Again, if you do have a question please chrestomathy one.
Your next question that comes from Donald <unk> important capital. Please go ahead.
Good morning, everyone.
Can you walk me through how you get to your revenue guidance for the fourth or how much of that is customer account how much of it is orders poor customer and how much of that is revenue border.
Yeah, Hey, good morning is September let me take a first shot at that so one of the.
A all we don't typically get into that level of detail on our guidance and particularly right now in the fourth quarter wanting to redo. The that we don't is we have a lot of leverage that we're pulling on a week to week basis.
To be able to drive the revenue growth either do any of those either through the marketing spend that we can lean into another week to week basis to drive new customer Israel marketing spend the drive additional customer engagement. So as we go through the quarter M. B C. How're initiatives going that are unleashing more labor capacity.
What does that allow us to do with marketing spend as we move through the quarter. How are the other initiatives that we have out there continue to impact customer engagement, which obviously has been very positive. So far this year, one or any continuing lasting effects of changes consumer b as in pandemic all of that basically comes together and pluses or minuses as we move through the.
Quarter at the end of the day for us to deliver into that no 15% of 19% year over year growth. So we're not you know we're not guidance, you're specifically, giving out direction on each of those ended but you'll components, but we're managing all of those on a weekly basis, depending on what we see and all around again the key dry.
[noise] with them how are we doing on all these initiatives to drive label capacity to be able to invest more in marketing.
And to be able to see how our customer engagement scores move.
And Donald they'll just the idea that Oh, sorry, just uhm, let me just jumping ahead onto that really quickly which is one of the things that we've mentioned before and we will continue to do in the fourth quarter is because of the fact that we are focused both on how to make sure we increase capacity, but also continuing our long term strategic growth plan.
We are implementing the product changes while also increasing capacity. So the goal is to both increase flexibility and capacity, which increases complexity, but these product changes that we're actually doing for the the the customers are really based on a combination of how we can.
<unk> increase the value per each customer as well as attract and retain new customers coming into the platform. So everything that we're doing has dual purpose across a variety of metrics and and so we continue to move aggressively $4, sorry, sorry to interrupt you a second question.
No I don't go there just a second before we just one more thing on that is what I'm talking about just a second ago as well you know obviously in queue too and we got revenue grow with them all component rubbery good customers reboot robbing poor customer and Q3. Our growth was obviously came primarily from rubbing poor customer wrote you know, albeit at a very high.
Historically high level in queue for like I said, what we'll balance all of these things as we move through the corner and accelerate the growth rate a bit you know up to that 14 to 90 per cent rate, but when we get the Q1, we are pretty confident that we believe that we're gonna be in a position where we.
Least them up labor capacity, where we can leading to mark you send to bring more customers in and so we would believe that in Q1 that you know double digit growth rate that we are expecting it talked about and all remarks will be driven again by.
Increasing customers as well as increase in revenue poor customer.
Well those all sound interested you except that I'm trying to figure out how you get to that because.
I I know I know you don't want to put it in exact terms, but.
You lost 40000 customers and sequentially and you and and orders droplet toured 35000 sequentially.
<unk> I see that kind of sequential drop and I think all of Goldman was with the wall direction. So how do you how do you change that.
Maybe maybe you could give it give us like this tells how you look at customer acquisition costs because.
I I don't know how you do that when you when customers are declining in your marketing you're still spending more money on market. So how do you even look at customer acquisition costs.
Yeah, we we look at our customer acquisition costs on a return basis, probably like you know everybody doesn't the industry and you'll be set goals out there in terms of where you know, we're adding customers and spending marketing dollars, where we get you know a return on that marketing dollar at least within one year, we can figure out what you're doing significantly better than that this year on customer.
Acquisition caused the decline in customers in two three is pretty typical for the seasonality other business. So and we did actually spend you know lower dollars in Q3 than we did in queue to it was a little bit higher obviously as presenters isn't that revenue, but but but lower.
And certainly lower than than what we spent a year ago and again some of the factors around that Linda went through on in her remarks around you know as we're trying to balance and build labor capacity your balance markings bamboo labor capacity, but as we.
Alleviate those labor capacity issues and by the way we've been alleviate your inbox you we've been growing double digit. So we've been able to you know have some success in that area that totally but as we alleviate that further than we lean more into market you spend which as we said we intend to do in Q1 will get customer grows back and when that customer growth comes back will.
Get additional.
Additional revenue growth from those new customers coming in as well as continuing to move the needle our customer engagement and some of the customer days and stuff. We can expect to continue to move forward as we're getting the full impact of all of these product improvements that we've been rolling out or improvements in our overall product offering that we've been rolling out throughout.
This year, but you know Glenda enumerated, you know actually stepping up and and Q4 with the customization initiative.
Exactly so I think part of what we've been looking at is the product improvements that we put into place early on had had a significant impact based on our existing customers in our best customer behaviors and continuing to drive those Ford and so that does add some complexity compared to.
To the same time last year in the product, but but what we do see is it's really more about those labor constraints that really have been the the primary driver when we think about our ability to lean heavily into marketing on the flip side of that the marketing has been getting significantly more efficient we were already within one year.
Pay back on our marketing programs, but we're can't continuing to seek it growth and inefficiency as we integrate full frontal marketing into our programs going for it. So it the trajectory is there it's really just focused on making sure that we can unlock that capacity, while making sure that we are adding those new customer and.
It's product initiatives that help engage and retain both existing and new customers.
Alright, well good luck, ladies and gentlemen.
[laughter].
Okay. Thank you.
Thank you.
He's been gentleman neutral can play that question and answer session. As we approach the completion of alcohol I will now turn it back I that to me is cause I'll ask you some closing remarks.
Thank you very much and I appreciate your time on behalf of everyone that blue apron, we want to wish you your family's colleagues and friends well and let you know there are teams are working diligently and effectively to bring incredible home cooking into People's homes, We look forward to providing an update when we report on fourth quarter results early next year.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.
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