Shares of Blue Apron Holdings Inc. (APRN) - Get Report plunged early on Thursday, Aug. 10, as CEO Matt Salzberg explained difficulties the meal kit provider encountered with new products and technology while Amazon.com Inc. (AMZN) - Get Report elbows into its market. The company is pulling back on market spending and scaled back expectations for the second half of the year, it said in reporting second-quarter earnings. 

Blue Apron lost 47 cents per share in the second quarter, a greater shortfall than the loss of 27 cents per share that analysts surveyed by FactSet Research Systems Inc. expected. Net revenue increased 18% to $238.1 million, topping a forecast of $235.8 million.

The company also could be dealt another blow as MSCI Inc. completes a review of whether it will continue to include companies with nonvoting shares in its indices.

After posting early gains before the open, Blue Apron shares had tumbled 14.6% to $5.36 by midmorning. The stock has lost lost nearly half its value since it priced at $10 per share in a $300 million IPO in late June.

Salzberg told investors that Blue Apron is rolling out "more flexible diverse and personalized" menu options and launching its "most automated fulfillment center to date" in Linden, N.J., to make its customers more happy and remunerative.  

"The reality is we are behind on this work," Salzberg said.

The company slashed marketing spending from $60.6 million in the first quarter to $34.5 million, as it focuses on its fulfillment center problems and its new menu options.

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Blue Apron said its plans ultimately will increase the lifetime value and revenue per customer. Customer rolls increased 23% to 943,000 from a year ago but dropped 9% from the prior quarter, where they totaled just more than a million.

The average customer spent $251 in the second quarter, an improvement from $236 in the prior quarter but down from $264 a year ago.

CFO Brad Dickerson said that Blue Apron has taken "a more cautious view" on results in the second half and plans to cut marketing spending. The company has targeted net revenue of $380 million to $400 million in the second half of the year, well below the $525 million that Wall Street expected, according to FactSet.

The company experienced "unexpected complexity" with the launch of the new Linden fulfillment center that will ultimately handle half of its production, Dickerson said. 

The company has had to retrain 5,000 workers on new technology it has deployed in all three of its fulfillment centers and has to manage a network of farms that supplies ingredients that are increasingly up-market. 

"Perishable food isn't a widget," Salzberg said. 

Meanwhile, competition is increasing. Amazon registered a trademark for its own meal kits in July, and Jeff Bezos' culinary ambitions are only growing with the pending purchase of Whole Foods Market Inc. (WFM) .

While Amazon is a newcomer to food delivery, it is a master of the type of fulfillment center issues that have hamstrung Blue Apron. 

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