NEW YORK, (Reuters) – Blue Apron Holdings Inc (NYSE:) Inc suffered a larger-than-expected loss due to a decrease in customer orders and increased food and labor cost. This affected the bottom line of the online meal-kit company.

The company’s shares rose nearly 2% in midday trading to $3.31. This was helped by statements from senior executives that normalization of costs is possible.

Blue Apron stated it had lost $38million, or $1.19 per shares, against an average analyst estimate which was losing 63c per share.

Company stated that it needed to handle higher absenteism caused by Omicron variants at the beginning and end of quarters, which led to more expensive temporary employees.

Randy Greben, Chief Financial Officer of the Company, told investors that the company had reached “high water mark” with its costs in the first quarter. He also stated that the prices for meal kits and wine products were up.

The quarter’s order volume per customer decreased by 5.6%, to 5.1, compared with the previous year. Comparatively to the previous quarter, orders per client rose to 5.1 from 5.

The new marketing campaigns have helped us acquire customers at a faster rate than last year’s Q1. In an interview with Reuters, Linda Findley, Blue Apron’s CEO, stated that there is no decline in customer engagement or behavior.

Marketing costs increased 40% by the company in the quarter that began, according to them.

Blue Apron will list its boxes at Walmart this month (NYSE:).com in an effort to reach new customers. It also plans to provide seven-day delivery for the majority of Americans by Q3.

According to the company, net revenue declined by approximately 9% over the year, reaching $117.8 millions. This was due to lower orders and customers.