Blue Apron Holdings Inc (APRN) 2020 Q1 法說會逐字稿

Ladies and gentlemen, good morning, and welcome to the Blue Apron Holdings First Quarter 2020 Earnings Conference Call and Webcast. (Operator Instructions) As a reminder, this call is being recorded for replay purposes. A slide presentation has been created to accompany today's remarks and can be accessed on the Blue Apron Investor Relations website. (Operator Instructions)

On this morning's call, we have Linda Findley Kozlowski, Chief Executive Officer of Blue Apron; and Tim Bensley, Chief Financial Officer.

Before handing the call over to the company, a few remarks about this call. Various statements that the company makes during this call about its future expectations, plans and prospects constitute forward-looking statements for the purpose of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by those forward-looking statements as a result of very important risks and other factors, including those described in the company's earnings release and SEC filings.

In addition, any forward-looking statements represent the company's views only as of today and should not be relied upon as representing its views as of any subsequent date. The company specifically disclaims any obligation to update these statements.

During this call, the company will be referring to non-GAAP measures, which are not prepared in accordance with generally accepted accounting principles. You are encouraged to refer to the earnings release and SEC filings, where it has been described -- these measures in more detail and to review the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures.

In addition, reconciliations of certain forward-looking non-GAAP measures referred to during this call is included in our earnings release, which is available on the company's Investor Relations website located at investors.blueapron.com under Events and Presentations.

With that, I would now like to turn the call over to Linda Findley Kozlowski, Blue Apron's CEO.

Linda?

Thank you, Ayli. Good morning, everyone, and thank you for joining us today. As the world continues to confront the health and economic challenges created by the COVID-19 pandemic and as our country responds to changes in our day-to-day lives, our priority, as it always has been, is the health and safety of our employees, customers

and the communities where we operate.

We take our role in delivering unique meal experiences into people's homes at a time when their -- when home matters more than ever, very seriously.

Before we get started, I want to express our heartfelt appreciation for all the brave frontline healthcare and other essential workers who are serving our country through this pandemic. We are also grateful to all of our employees and their commitment and efforts of providing consumers access to our high-quality meal kits made from delicious ingredients during these unprecedented times.

My remarks today will primarily focus on 3 areas: one, an overview of the heightened demand we have been experiencing since late March as a result of the changes to consumer behavior and response to COVID-19; two, a review of our first quarter performance, which includes indications of continued progress towards our previously announced growth strategy prior to the effects of COVID-19; and three, a more detailed look at changes we implemented as a result of COVID-19 as well as some of the most recent trends we are seeing in our business and what we believe that means for the second quarter.

We operated in 2 very distinct environments so far this year, a pre- and post-pandemic world, and I'm proud of our team's ability to execute on our changing business needs in both situations.

First, let's talk a bit about the recent heightened demand for our meal kits. With regard to consumers' response to the COVID-19 pandemic, the initial sharp increase in demand among new and existing Blue Apron customers came in late March as the country started to adapt to stay-at-home and restaurant restriction orders that took effect around most of the country.

We believe these government actions contributed to more people looking for options to have their food delivered directly to their door. While we've had to make some temporary adjustments to our offerings and operations as demand started to shift, the sequential quarter-over-quarter efficiencies we've driven in our business have helped us provide the necessary infrastructure to adapt to this increase in demand.

This positioned us to be able to immediately begin ramping up our capacity in our Linden, New Jersey and Richmond, California fulfillment centers, primarily focusing on increasing head count to enable us to fulfill meal kit orders.

We recognize that we create a product that helps people during this challenging time and have been relentless in our focus to serve as many households as possible. We expect that our Q2 results will begin to reflect this increased demand, and in a moment, we will speak about what we expect that to look like.

In addition, based on recent indications of the effect of longer-term impacts that we believe COVID-19 may have on consumer behavior relating to cooking at home, we believe there will be an ongoing positive impact on our business for at least the near and immediate term. There has been a significant increase in the number of households cooking at home as a result of the stay-at-home and restaurant restriction orders around the country. Even as restrictions on consumer behavior begin to ease, we expect that there will be a shift to a new economic and social norms, reflecting the changes in cooking and eating habits developed during the weeks or months consumers spend at home, and these will persist for some time.

We also believe that even as restrictions begin to lift, there may be a long-term negative impact on the ability of some restaurants to operate at levels prior to the pandemic, if at all. These factors, combined with the work that we're doing to retain and engage customers, lead us to believe that a portion of the uplift in demand we have recently experienced can be maintained beyond the period of the direct impact of COVID-19.

At the same time, I want to be clear that even with the increased demand we have seen in recent weeks, we remain focused on our growth strategy, which we believe strengthens our ability to serve our customers, including during these times of uncertainty.

Before we get into additional detail on some of the effects of COVID-19 we have been seeing, we will quickly summarize our Q1 results. Both net revenue and new customers increased sequentially quarter-over-quarter as we continue to make progress with our growth strategy.

In addition, average revenue per customer saw another quarterly sequential increase, $271. Our variable margin improved 150 basis points from the fourth quarter of 2019 to over 40% in Q1, and net loss was favorable compared to the range that we provided when we reported fourth quarter results.

Tim will review each of these metrics in more detail shortly. We believe our first quarter performance demonstrates the progress our team is making towards this strategy that we announced last August to: engage more customers that have our best customer characteristics, increase choice and flexibility to better integrate into our customers' lives and scale our marketing spend efficiently.

This worked for quarterly sequential and a year-over-year rise in orders per customer, which we believe, in turn, reflects the effectiveness of the new products and new customer engagement that we are creating. While we've had to scale back or delay some new products to meet the current heightened demand, we believe our growth strategy, combined with the solid fiscal discipline that we've consistently demonstrated over the last 6 quarters, provides us with a foundation for future profitable revenue growth beyond the current business environment.

The first quarter was a significant period for new product launches. In fact, we launched more new products in Q1 than in any other quarter before. Specifically, we added 5 new major products in the first quarter compared to just 5 new major products in the prior 10 quarters combined.

These product launches included meal prep, which added an 8-serving plan that can be prepped in as little as 90 minutes per week as well as our premium offering that delivers an elevated cooking experience with advanced cooking techniques and specialty protein combinations. We've been pleased with the performance of both since launch. In addition to introducing new products, we continued our culinary partnerships with a 6-week collaboration with Seamus Mullen that focused on recipes for a healthy lifestyle. And we plan to soon launch a partnership with award-winning chef and restaurateur, Tim Hollingsworth, with a focus on the Comfort Foods this summer.

These examples of how we continue to add more choice and variety to our menu demonstrate the progress we were already beginning to achieve towards our growth strategy prior to the COVID-19 pandemic.

Moving on to what has happened in our business since the COVID-19 pandemic, I'm going to devote the balance of my prepared comments this morning to review expected business impacts, a number of the actions we've taken to meet increased demand, including operational changes, hiring and HR progress, implementing safety enhancements and managing our supply chain and marketing functions.

I believe the work that we previously put into the implementation of our growth strategy has helped position us to meet this rapid surge in demand.

Based on trends we've seen in response to COVID-19 as well as certain assumptions, which Tim will note in his comments, we now expect Q2 revenue to grow year-over-year by high single digits on a percentage basis and expect net loss to continue to narrow versus the previous quarter.

We also expect both adjusted EBITDA and operating cash flow to be positive in the quarter. As a result of the changes in consumer behavior we've been seeing in response to COVID-19, including both an increase in meal kit orders and an increase in meal kit average order value, we saw meal kit demand increased by approximately 27% in the first 3 weeks of April compared to the first 3 weeks of March. As we noted earlier, this increase came quickly, and we initially were not able to meet all of this heightened demand. And as a result, meal kit net revenue increased approximately 22% for the same comparable time period.

We define meal kit demand as the number of meal kits ordered in that time period multiplied by the average order value for that period. And we define meal kit net revenue as orders actually fulfilled by multiple -- multiplied by the average order value.

We have been working to build our fulfillment center back labor force to enable us to meet this new increased demand. And assuming the heightened level of demand is sustained or continues to grow as we believe there is the potential for, we have enough labor to meet the demand directly. In a moment, Tim will provide more details around our second quarter expectations.

Now let's move on to the actions we've taken to meet demand. First, on operations, as I mentioned, the initial spike came late in Q1, and we quickly prioritized increasing our fulfillment capacity. While working to increase capacity, we initially prioritized fulfilling the increased demand from existing customers, and we canceled or delayed a portion of our shipments to some new customers and recently reactivated customers by 1 week.

We then built our plan to quickly increase capacity while enhancing our already comprehensive personal hygiene and sanitation standards following CDC and other government regulations designed to prevent the spread of COVID-19. As we work to continue to meet increased consumer demand, we believe that one of the challenges from Blue Apron's past is now serving us well, as we have additional fulfillment center capacity.

We believe we have the equipment, facilities, food safety standards and supply chain to support the higher demand, so our primary need at this time has been hiring in our fulfillment operations.

As we begin the process to accelerate temporary and permanent staffing in our Linden, New Jersey and Richmond, California fulfillment centers, we also created an immediate capacity to serve the higher demand by reducing variety in our menu options to limit the need to frequently change the production lines in our fulfillment centers. This decision allowed us to have additional time to pack meal kits and allowed us to get more meal kits out to more customers.

We did this by discontinuing a subset of recipes for an interim period and closing some weekly offering cycles as early as we continue to hire.

We understand this practice is in line with others in the meal kit space that are adapting to meet new demand levels.

On hiring in HR, we extended the closing date for Arlington facility by a few more weeks for added capacity, but we still intend to close this facility in the second quarter as planned and transfer that volume to Richmond and Linden.

To show our support for all our teams at our fulfillment centers and to help attract new hires, we recently implemented a temporary wage increase and an attendance bonus for our dedicated hourly employees. This applies only to our fulfillment center employees as our corporate, test kitchen and customer experience employees have been working from home since mid- to late March.

Inside our fulfillment centers, the safety and well-being of our employees remains our top priority. As I referenced in my earlier remarks, during this time, we have also enhanced our existing comprehensive personal hygiene, employee safety and sanitation standards and have instituted other measures to help prevent the spread of COVID-19.

As an FDA-regulated operation, our employees have always been required to wear appropriate protective equipment at all times on the production floor, including nitrile gloves, smocks, hair and beard nets and safety glasses.

We also hold an additional food safety certification from Safe Quality Food's Food Safety Code, which is widely considered to be one of the most rigorous and comprehensive food safety standards in the world.

In addition, employees are not allowed to enter the production floor without stepping through a disinfecting foot bath and washing their hands thoroughly.

In response to COVID-19, starting in early March, we enhanced our existing procedures with additional handwashing requirements, changed shift interactions to reduce human contact, increased social distancing efforts and awareness, both on and off the production floor and further strengthened equipment sanitation procedures.

Also, we are now providing our fulfillment center employees with masks, in line with recent guidance from the CDC, FDA and local regulations. All employees are now required to wear masks while in any area of our fulfillment centers.

Next, I would like to discuss supply chain availability and safety. To date, we have not experienced any significant disruptions in our supply chain. Blue Apron tightly manages its supply chain, and we seek to work with the suppliers who hold and value the same high safety and sanitation standards that we do.

Because we operate on a just-in-time sourcing model and have a strong network of suppliers, we can make adjustments as needed based on both our needs and the needs of our suppliers. Also, this same tightly controlled supply chain means our food has a much more direct path from producer to box with minimal human contact in between.

We're grateful to be able to continue to support our valued suppliers that have been affected by other closings and slowdowns in the foodservice industry. Our team continues to actively manage our supply chain to minimize impact to customers while maintaining the high standards we are known for on animal welfare, freshness and quality.

Finally, I want to provide an update on our current marketing efforts. While marketing remains an essential part of our business, we have slowed and adjusted our marketing spend based on the heightened demand we've been seeing.

We have temporarily shifted some of our marketing dollars to ramping up production and engaging our existing customers with content, social engagement and support for staying at home. We are also using this period to build our marketing strategy for the future, based on the third pillar of our growth strategy as to how we expand our reach for future growth in a scalable and sustainable way. I'll conclude my comments this morning with a review of some of the positive metrics that I believe underpin our second quarter guidance.

As mentioned, the increase in demand started the last weekly cycle of March. Since that time, we have continued to see improvements in both the number of active Blue Apron customers as well as increase in average revenue per customer. The improved average revenue per customer generally reflects both increased orders per customer as well as higher average order value.

Blue Apron has generated year-over-year increases in both of these metrics in the last 5 consecutive quarters. We have seen a further increase in those metrics over the last few weeks as our customers look for meal solutions following the various stay-at-home and restaurant restriction orders and other restrictions on consumers that have been implemented throughout much of the country.

While our trends have been positive in recent weeks, our focus remains on continuing to build on our products and services in order to both meet the immediate need of our existing and new customers and work to retain those who've developed an appreciation for cooking at home and connecting with loved ones over meal time.

As we don't know what the future with -- will hold in regard to the longer-term impacts of the pandemic on our business, we are not relying on this recent demand and continue to be focused on our 3-pronged growth strategy, as we move forward in the current environment. We believe that the strategic planning and budgeting done in the last year is helping us to adapt to meet this demand increase. We also remain confident that our previously announced growth strategy continues to be the right strategy even now. And as we stated in February, our Board has undertaken strategic alternatives review process to support the execution of this strategy and enhance long-term shareholder value.

We are grateful to our long-standing customers and those new to Blue Apron who are inviting us into their homes. I believe these customers appreciate the many attributes of the meal experience we deliver from discovery to quality to connection, and we expect that many of them will continue to cook with us in the future.

Our growth strategy is a critical component to retain our customers and attract new ones. We currently plan to continue to ramp-up our operations to meet the demand to get as much food to as many homes as possible, while maintaining our high level of customer service, satisfaction and safety. I'd also like to thank our dedicated employees for their flexibility as we've made changes to their work environment to meet elevated demand and we've put in place additional personal hygiene, sanitation and safety procedures.

Even with the rapid evolution in our fulfillment center processes and the need for our nonfulfillment center employees to work from home, we continue to provide our customers with the delicious meals they crave at the level of quality they've come to know and expect from Blue Apron.

I will now turn it over to Tim to talk through our financials in more detail.

Thank you, and good morning, everyone. Echoing Linda, I would also like to thank our entire team as they continue to navigate and quickly adapt to this ever-changing environment, enabling us to deliver as many Blue Apron meals to our customers as we possibly can during these unprecedented times.

Now turning to Blue Apron's first quarter performance. We delivered first quarter results within the guidance range we provided on our February earnings call. As Linda stated earlier, we believe that these results validate the progress our cross-functional teams have made against our previously announced 3-pronged growth strategy.

Net revenue in the first quarter of 2020 was $101.9 million compared to $141.9 million in the prior year and $94.3 million in the fourth quarter of 2019. As indicated previously, we have spent the last year refocusing our marketing investments, aiming to become more efficient in how we attract and engage customers. While we knew this transition would likely have a negative impact on net revenue throughout 2019, strengthening our customer base is a foundational step for executing our growth strategy as we work towards building a healthy, long-term sustainable business.

As we entered 2020, and prior to seeing the effects of COVID-19 pandemic on our business, we leaned back into our marketing investments to leverage improvements to our product and customer experience. As a result, we saw sequential quarter-over-quarter growth in both net revenue and customers as well as continued improvement in certain customer metrics.

Marketing spend in the first quarter of 2020 increased in both absolute dollars and as a percentage of net revenue on a quarter-over-quarter and year-over-year basis to $15 million or 14.8% of net revenue, driving an increase in the number of customers of 7% quarter-over-quarter to 376,000.

While maintaining our disciplined customer acquisition mindset, we also saw improvements in certain key customer metrics that point to a strengthening customer base. Average revenue per customer and orders per customer improved 5% and 4% year-over-year and 1% and 2% quarter-over-quarter, respectively, finishing the first quarter at higher levels than we've seen in the last few years.

On the cost side, COGS, excluding depreciation and amortization, as a percentage of net revenue improved 150 basis points quarter-over-quarter to 59.5% in the first quarter of 2020 from 61% in the fourth quarter of 2019. The quarter-over-quarter improvements in COGS largely reflect the expected seasonal trends of the business as well as our continued focus on cost efficiencies.

Product technology and G&A or PTG&A costs declined 13% year-over-year to $34.2 million, reflecting our team's ongoing commitment to optimizing our cost structure and diligently managing expenses.

Other operating expense was $3.2 million in the quarter and 8.1 -- with $8.1 million of changes related to the planned closure of our Arlington, Texas fulfillment center, partially offset by a gain of $4.9 million from the unwinding of our build-to-suit accounting as a result of our exit from our unoccupied Fairfield, California lease.

We officially exited the Fairfield, California lease on 31st March, and we are scheduled to be fully exited from our Arlington fulfillment center by June 1.

On the bottom line, net loss for the first quarter of 2020 improved 8% on a quarter-over-quarter basis to $20.1 million from $20.9 million in the fourth quarter of 2019. Adjusted EBITDA finished the quarter at a loss of $5.8 million, representing a 30% improvement quarter-over-quarter compared to a loss of $8.3 million in the fourth quarter of 2019, driven primarily by efficiencies in our fulfillment center network and our continued focus on cost optimization.

Now turning to our financial outlook. Let me preface our Q2 guidance by sharing some assumptions. Our guidance attempts to account for the continued impact of COVID-19 on our business, including as a result of change in consumer behavior and grocery alternatives and the magnitude and timing of the impact on our business when the effects of COVID-19 and related restriction begin to ease. Further, our guidance assumes that we will not experience any significant disruptions in our fulfillment operations or supply chain as a result of the COVID-19 pandemic.

As Linda discussed in her comments, we have seen a sharp increase in demand for our meals in Q2 as a result of the COVID-19 pandemic, driven primarily by a growth in customers as well as improvement in certain customer metrics such as orders per customer and average revenue per customer. Because of this increased demand, we are expecting net revenue in Q2 to grow year-over-year in the high single digits on a percentage basis to approximately $130 million.

Notwithstanding substantial investments in our frontline fulfillment center team as volume ramps up, we expect to deliver a net loss of no more than $6 million, positive adjusted EBITDA of at least $5 million and positive operating cash flow of at least $10 million.

As Linda mentioned, we believe that the COVID-19 pandemic will continue to affect our consumer behavior for some time and will continue to benefit our business going forward beyond Q2.

We also believe that our liquidity outlook will benefit beyond Q2 as a result of the increased demand we have seen to date. We cannot, however, provide specific guidance on -- beyond Q2 since at this stage, it is difficult to access the duration of magnitude of the impact of this new normal on our business for future periods.

As we announced in February, the company's Board of Directors continues to evaluate a broad range of strategic alternatives to maximize shareholder value, including to support the execution of the company's growth strategy.

For easy reference, a reconciliation chart from our net loss to adjusted EBITDA is included in our earnings release, which have been posted to the Blue Apron Investor Relations website.

Linda and I will now take your questions.

(Operator Instructions) Our first question will come from Maria Ripps with Canaccord.

It's great to see customer growth and strong demand here. I just wanted to ask you a couple of questions. Maybe can you spend a minute talking about how you're thinking about maintaining this healthy level of demand and customer engagement when we have passed sort of this wave of heightened demand due to the pandemic?

Sure. I can start with that, and then Tim can add anything that he'd like to join in. So what we see, first of all, from the third-party research out there is that there is expected changes in core customer behavior that encourage more cooking at home even after some of these challenges pass, and that there's going to be quite some time that that sort of lags behind as people are looking at.

That being said, we assume and understand that the only way that we retain and engage people past this point is to give them a great experience with the product. That's why we're particularly happy with some of the product initiatives that we've put forward in Q1 as well as some of the work that we've been doing over the last 18 months to try to drive more variety, more choice and more experience because all of those were designed to retain and answer the questions about health, about variety and about flexibility that our current customers and past customers have been looking for in the product to begin with.

In addition to that, we are also continuing on with our existing road map to add more of those options in that we had already planned for 2020, as we believe that that's a big indicator in how people will retain with our product and a big part of what they're looking for.

What hasn't changed and what we will continue to maintain and we know is important for our product -- I mean our consumers coming in is that we have great recipes, great flavors, high-quality ingredients, high animal welfare standards, and we intend to continue to maintain those so that we can have that differentiation of the quality of the product, along with the fact that we're meeting customers' needs when it comes to health, variety and flexibility.

In addition to that, we've also been changing and enhancing our marketing program to look at both acquisition and retention and assuming how we can actually apply that to our existing customer base as well as the new demand that's come in from this to maintain the appropriate proportion of that going forward.

We have been looking carefully at the data to understand trends and understand the trends in our underlying customer base, and we are seeing that strength there through some of those key customer metrics that we were talking about earlier in the call.

Tim, do you want to add to that?

Yes. No, I think that's great. A couple of things kind of to put the pieces together. Just to go back again, the first thing is, in Q1, we actually were very happy that when we increased our marketing spend a bit year-over-year and quarter-over-quarter as well as starting to see the positive results of the growth initiatives that Linda was just talking about, we were pretty happy that we did see quarter-over-quarter increase in revenue and specifically increase in all these key customer metrics. And maybe most importantly and something you called out at the beginning of the question, that 25,000 increase in overall customers quarter-over-quarter, like a 7% increase in customers.

So even though we didn't see any real impact of the COVID-19 pandemic on our business in Q1, we did see positive impact of our growth strategy in Q1. So that was great, and that's something to think about as we move beyond Q2.

Of course, we talked about, in Q2, we're seeing the sharp increase, it's driven by an increase in customers as well as increase in customer orders and revenue per customer. So that's great. And as Linda talked about, we're seeing that happen on -- with very efficient marketing spend. So when you put those 2 things together, as we go into the second half of the year, we do believe that there'll be extended effects of that shifting behavior related to customer -- consumer eating habits that Linda talked about, and then that's going to span beyond the direct Q2 COVID-19 period.

But at the same time, as Linda was just talking about as well, we will be continuing to lean into those growth initiatives. We think that we'll have -- be able to be quite efficient from a marketing side as we continue to lean back into marketing in the second half of the year. And we think that -- and we will, of course, as Linda just pointed out, continue to lean into those growth initiatives that we've been talking about for some time.

So I think the combination of those things puts us in a good position going forward. And we can't specifically guide to what could happen in the second half of the year because of all the uncertainties. We do believe that there'll continue to be some positive effects as we move out of Q2.

(Operator Instructions) Our next question will come from [Ari Cole] with Cole Capital.

Three quick questions. I recognize the fact that you've had strong demand in the April time frame. I was trying to better understand how many sort of -- how much lost revenue there was maybe in the month of April due to canceled orders that you were not able to fulfill?

And then question number 2, as you know, your full menu is not available now to customers, I was wondering, through your hiring efforts, when you would expect the full menu options to be available? Because right now, even when one orders for May, the full menu options are not available yet. And then the third question is just on -- I may have missed this earlier comment from you, but have you made any comment about how materially higher revenue per order and frequency of orders has changed here in the April time frame when COVID-19 was more evident?

Yes. Linda, you want me to just step in on the first part of that, and I'll let you talk a bit about...

Sure. Yes.

Okay. Yes. So Ari, by the way, thanks for the call. I appreciate you -- appreciate the question. The -- what Linda went through on her -- in her section is pretty much what happened in April in terms of the demand versus what we were able to service.

And to be clear, the pickup in demand largely related to the impact of the COVID-19 pandemic on top of, of course, the growth initiatives that we already had out there in the market in Q1 was pretty big. So we saw that 27% increase in total demand. Now without going into the individual specific metrics, I can tell you that, that was driven by kind of multiple things. It was driven by an increase in the number of customers during that time period, an increase in the orders per customer in that time period and an increase in revenue per order during that time period. So all of those things were kind of positively moving us towards that 27% increase in demand.

Now it happened pretty quickly, so we had to start ramping up labor under FCs very quickly to service that. And so we were able to service about a 22% increase. So the difference between that 27% pickup and 22% that we were able to service was -- obviously represents a little bit of missed opportunity in April.

But as Linda also said, we've been continuing, obviously, to ramp up as we look for increased demand through the rest of Q2 and believe that we'll be in good shape to be able to handle the demand going through the rest of the quarter. So hopefully, that handles that part a bit.

And then, Linda, if you want to talk about the menu offerings?

Sure. So on the menu offerings, obviously, one of the things we never really want to sacrifice is variety for our customers. At the same time, recognizing the importance of being able to provide as many people as possible with food in their homes, we did make the decision to limit the choices on the menu in order to speed up our ability to deliver food safely.

And so we were -- we did make that difficult decision in order to reduce some of the variety that was available, and we're expecting that within the quarter, we'll be able to return to that same level of variety, and we're working very hard to get to that as quickly as possible.

But again, we still feel like our priority is making sure as many customers, both new and existing, can get the food that they're looking for first, and that's what we're prioritizing now. But we are getting close and continuing to ramp-up, so we'll be able to have news for you fairly soon on going back to full variety of the menu

(Operator Instructions) I'm showing no further questions. This will conclude our question-and-answer session. As we approach the conclusion of our call, I will now turn it back over to Ms. Kozlowski for closing remarks.

Thank you very much. On behalf of everyone at Blue Apron, we do want to wish you, your families, colleagues and friends well in these extremely unsettling times, and let you know that our teams are working diligently and effectively to bring incredible home cooking into people's homes in this important and challenging time. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.