You never get a second chance at making a first impression, and Blue Apron (NYSE: APRN) will have to do a lot of impressing this week when it posts its first quarterly report as a public company.
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The gourmet meal-kit provider has had a brutal first two months on the market. Underwriters were hoping to price its June initial public offering between $15 and $17, ultimately settling for $10. It may have seemed like a bargain price for a fast-growing company, but since the stock went on to plunge another 42% over its brief publicly traded tenure, Thursday afternoon's report will be huge. Blue Apron will have to prove that it's a worthy growth stock if it wants to silence the growing number of skeptics, and a strong financial report could do that.
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Blue Apron's sales more than doubled last year, soaring 133% to hit $795.4 million. Top-line growth slowed to 42% in the first quarter, and that trend will continue as Wall Street pros see revenue climbing just 27% higher for all of 2017.
Analysts are targeting a loss of $0.30 a share on $235.8 million in revenue for the second quarter. The deficit isn't a deal-breaker: Blue Apron is busy building out its growing empire. In fact, Blue Apron shares took a small hit last week when reports of layoffs at its Jersey City facility surfaced, only to have the company clarify that it's winding down operations there in the fall as it moves to an even larger fulfillment facility nearby.
The bigger worry at Blue Apron right now is revenue growth. Blue Apron generated $201.9 million in revenue during the second quarter of last year, so we're eyeing a mere 17% top-line uptick. If Blue Apron isn't able to ring up more than $244.8 million in revenue -- a tall order given where analysts are parked -- it will be its first period with a sequential decline in revenue and orders. Seasonality won't be an excuse if that happens, as revenue and orders inched nicely higher between the first and second quarters in 2015 and 2016.
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Blue Apron has struggled with customer retention. Foodies don't stick around for too many of the weekly deliveries, and that's before considering the potential hit that can happen if the country's leading online retailer ramps up the meal-kits platform it is testing.
It's a gloomy scene, with growth decelerating sharply and the fear-rattling implications of a sequential slip in popularity. However, the silver lining is that the stock's already trading at roughly a third of the high end of its initial pricing range; everyone's bracing for a brutal quarter. The contrarian hope has to be that the June IPO raised awareness of the brand, resulting in an uptick of hungry tire-kickers willing to give Blue Apron a shot.
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