Blue Apron Holdings Inc. (NYSE: APRN) is a direct meal-to-customer delivery company, standing as a pioneer in its domain. Despite the strong enthusiasm its concept received upon launch, it is fast descending towards failure, as confirmed by the most critical of metrics. APRN stock has shed over 86% of its price in the last 12 months alone.
What Is Blue Apron?
Investors interested in Blue Apron stock as an investment prospect may be interested in learning about the company itself.
Blue Apron Holdings Inc. (APRN) is a company that delivers meal kits directly to consumers. Each meal kit contains fresh and seasonal ingredients along with an original recipe for customers to cook at home.
The company also has an e-commerce market called Blue Apron Market where customers can purchase cooking tools, utensils, pantry items, and other products.
Additionally, Blue Apron stock is valuable to investors, as the company has a direct-to-consumer wine delivery service called Blue Apron Wine, which offers wines that can be paired with its meals.
The company caters to a wide range of customers, including young couples, families, singles, and empty nesters, and customers can order from the Blue Apron website or mobile application. Blue Apron was founded in 2012 and is based in New York.
Why Did Blue Apron Shares Go Up?
Blue Apron shares have seen a surge in the last month taking it from $0.50 to as high as $0.62. This rise has been linked to a number of positive catalysts. Some of these Blue Apron news stories are discussed below:
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Collaboration with Molly Yeh
The collaboration with cookbook author Molly Yeh to introduce limited-edition, Asian-inspired recipes, and a unique burger bar concept could have generated excitement among customers and investors, causing Blue Apron stock to surge.
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DashMart Expansion
The expansion of Blue Apron’s partnership with DashMart by DoorDash, which allows for expanded availability of Blue Apron’s Heat & Eat meals in additional markets, could have increased revenue and market reach.
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Blue Apron PLUS
The launch of Blue Apron PLUS, a new savings program exclusively on Verizon’s +play platform, may have attracted more customers and boosted revenue. This has proven a major catalyst to Blue Apron share price.
Blue Apron Prospects Further Weaken After Poor Results
According to its latest earnings release, Blue Apron Holdings Inc. (APRN) has continued its drastic performance, seeing its quarterly revenue shrink YoY by 11.7%. This weakening growth came as the company’s total number of customers dropped from 350,000 to below 323,000.
It evidently continues to face the pressure of a rising inflation environment and struggles to reel in first-time customers. The pressure continues to mount as Blue Apron’s liquidity position fast deteriorates, with the latest quarterly cash bleed amounting to almost $23 million.
Broader Challenges for APRN Beyond the Immediate
Bearish analysts are pointing out that APRN is not only struggling due to the macro headwinds it faces, but also due to the fact that the market largely perceives It as a fad.
In fact, its market share has been shrinking since 2019, given its inability to adapt according to the needs of its customers. Competitors such as HelloFresh are increasingly posing a threat to Blue Apron, as they leverage their logistical strengths to scale up, in proportion to demand.
Smaller local players are also proving to be a more favorable choice of customers, given fast delivery times, lower costs, and a higher degree of overall reliability.
Blue Apron Financial Situation and News
Blue Apron stock plummeted after the company reported a decline in sales for the first quarter of FY23. Despite beating the consensus estimate for sales at $113.1 million, the company experienced a 4% YoY decline in sales.
One reason for this was a 14% decline in orders, even as the average order value rose 11.6% to $70.27. The number of customers also decreased by 11.2%, although the average revenue per customer grew by 7.8% YoY to $346.
Despite reporting an EPS loss of $(0.26), the company beat the consensus loss estimate of $(0.32). Adjusted EBITDA loss also improved from $(31.4) million to $(8.7) million YoY.
However, the company’s negative free cash flow of $(10.8) million and its cash and equivalents of $31.6 million were causes of concern for investors.
The decline in sales, orders, and customers may have been a result of increased competition in the meal-kit delivery market and a shift towards more grocery delivery options during the pandemic. All this collectively caused a drop in the market prices of Blue Apron stock.
Frequently Asked Questions
How to Buy Blue Apron Shares?
To buy Blue Apron shares, you will need to open a brokerage account with a platform like Robinhood, E*TRADE, or TD Ameritrade, deposit funds, search for Blue Apron’s ticker symbol (APRN), and place an order to buy the shares at the current market price.
What is Blue Apron’s Share Price?
Blue Apron’s share price is presently $0.50
Why is Blue Apron Failing?
Blue Apron share price dropped due to several factors. These include a decline in sales and orders, a decrease in the number of customers, negative free cash flow, and increased competition in the meal-kit delivery market.
Conclusion
The last 12 months have been deadly for APRN stock. From its high of $9.21, the stock is trading seriously close to its 52-week low of $0.61. This price trajectory is merely an indicator of the market’s fast-falling confidence surrounding Blue Apron, with the macro-economic challenges only accelerating its downfall.
