Shares in Blue Apron are getting smoked, fried and flambéd in early trading on Thursday.
The meal kit delivery service saw its shares plunge as much as 19.4 per cent to a new record low of $5.03 within minutes of the opening bell as investors vented their disappointment with its first earnings report as a public company.
The drop puts the stock’s precipitous decline from its $10 June IPO price at nearly 50 per cent.
While Blue Apron reported an 18 per cent jump in revenue for the June quarter, investors appeared spooked by the group’s sharply higher operating costs, which rose by more than a third year-on-year to $269m and exceeded group revenue by some $31m.
The company also lost customers during the quarter. Blue Apron said it had 943,000 customers at the end of June, a 9 per cent drop from the 1.03m it had at the end of March.
The company attributed the higher costs incurred during the second quarter to delays and investments in expanding and automating its fulfillment centres. Blue Apron said it planned to offset some of these operational expenses by further cutting its marketing spent, which already fell by some $26m between the first and second quarter.
However it warned this will hit its top line growth, and said it expects sales for the second half to be between $380m-$400m. Revenue came in at $482.9m in the first half of the year.
“These complexities have arisen within the last month,” said Bradley James Dickerson, chief financial officer.