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Feeling Blue: Or, in the case of Blue Apron, the company was feeling black and blue on Thursday.
The internet-based meal-kit delivery company saw its shares plunge 17.6 percent, to finish the day at $5.14. It was not the kind of reaction Blue Apron officials had to be hoping for when the company delivered its first quarterly results since going public back in June. Before the stock market opened, Blue Apron said it lost 47 cents a share on $238 million in revenue, while Wall Street analysts had forecast the company to lose 30 cents a share on sales of $235.8 million.
In addition to reporting a loss that was bigger than analysts had expected, Blue Apron also said its operating costs reached $65.7 million — an 86 percent increase over the same period a year ago. In order to help get its costs in line, Blue Apron said last week it will close a fulfillment center in New Jersey, and could lay off hundreds of employees as a result.
Those escalating costs were just part of the headaches Blue Apron suffered during the quarter. Blue Apron said it suffered delays in launching new products, and the company is facing more competition on all fronts: from similar subscription-based delivery companies, grocery stores that are offering prepared meal kits, and the likes of Amazon with its massive, quick distribution network.
Blue Apron was able to put a feather in its cap by saying it grew its subscriber base, with 943,000 people ordering its meal kits in the quarter — a 23 percent gain from a year ago.
But such companies rely on increasing sales from customers to help cover the costs of items like expansion and the addition of new menu items. And in Blue…
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