Top of the Order:
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 Apron’s case, the company averaged $251 per customer during the quarter, down from $264 in the same period last year.
And with Thursday’s losses, Blue Apron’s shares are down by 48.6 percent since the company went public at $10 a share barely two months ago. With as many black eyes as it has taken, Blue Apron may be feeling blue for some time to come.
Middle Innings:
Breaker, Breaker?: Just about two weeks after delivering its first Model 3 sedans, Tesla may be on the road to bringing out something bigger. Way bigger, in fact. Tesla Chief Executive Elon Musk has said the company could show off the first of a planned line of electrical semi-trucks as early as next month. Musk hinted that vehicle could be a semi-autonomous truck, and Tesla is looking at testing the vehicles in Nevada.
Bottom of the Lineup:
Watch This: ICYMI…Facebook has unveiled Watch, a new platform for watching and discovering programs on the social network. Watch is part of Facebook’s plans to add new, original video programming produced for the company. Facebook will make Watch available to a limited number of users in the U.S. before eventually rolling it out to all of its user base. However, almost as soon as Watch was unveiled, questions arose asking whether, or why, people would want to watch TV-style programs on Facebook.
Quote of the Day: “Land values are probably the most psychological part of any real estate transaction.” — Mark Ritchie, president of San Jose-based realty brokerage Ritchie Commercial. Ritchie was speaking with regards to Google’s plans for a big business expansion in San Jose.
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