Order frequency takes Q1 hit at Marley Spoon

It started out as a lackluster first quarter for meal kit provider Marley Spoon, but sales picked up in February and March, the company said in releasing its earnings late last week. Despite the uptick, the company is undertaking a cost-reduction program amid a lowered financial forecast.

The company reported €91 million ($9.98 million) and an operating cash flow of €4.0 million ($4.38 million) in net revenue for the quarter. 

“While the Company had expected a year-over-year decline in revenue for the quarter, we experienced lower-than-planned acquisition volume in January, which improved in February and March. However, acquisition costs were in-line with our expectations, ensuring attractive unit economics,” Marley Spoon CEO Fabian Siegel in a statement. 

Order frequency took a year-over-year hit in the United States and Europe, setting the stage for slumping sales to last throughout the year, the company said. That has prompted Marley Spoon to lower its 2023 revenue guidance, the company reported. They hope to reverse the trend through merchandising efforts and ramping up loyalty programs. 

“The company has begun initiatives to more actively influence its customers’ order frequency by launching active merchandising and customer loyalty programs across its brands, which are to take effect in the second half of the year,” the company said.  

Despite the slow start, though, the company anticipates revenue growth in Q4. 

“Furthermore, as a reaction to the lowered revenue outlook for this year, the company initiated a cost-reduction program which we expect to result in approximately €10 million ($10.97 million) in annualized savings,” the company said in a statement. 

Marley Spoon noted that despite its lower-than-expected sales, its strong margin performance and cost discipline “enabled us to meet our plan on Operating EBITDA, reducing our Operating EBITDA loss in the first quarter by €3.3 million ($3.6 million) compared to the prior year.”  

“This result keeps us on track to deliver on our guidance for contribution margin expansion to 30-32% and positive Operating EBITDA for FY 2023,” the company added. 

Germany-based Marley Spoon was founded in 2014 and operates primarily in Australia, the United States and the European countries of Austria, Belgium, Germany, Denmark and the Netherlands. Its various brands also include Martha Stewart & Marley Spoon, Dinnerly and Chefgood.