The struggling meal-kit provider slumped as it announced layoffs, and as investors anticipated a weak third-quarter earnings report and absorbed news of an IPO from rival Hello Fresh. The stock was volatile throughout the month but sold off sharply the last two days in October ahead of its Nov. 2 earnings report.
The biggest news of the month, the layoffs, seemed to exemplify Blue Apron's travails thus far as a publicly traded company. It's rare for a company to let go of workers just months after its IPO, but then again the meal-kit specialist now trades 60% below its IPO price, as it has repeatedly disappointed the market.
On Oct. 18, Blue Apron said it would cut about 300 jobs, or 6% of its workforce, as the company deals with slowing revenue growth and a plummeting stock price. In a letter to his employees, CEO Matt Salzberg called the decision "painful" and said it was the result of a "roadmapping and reprioritization exercise."
The layoffs may be the clearest sign yet that Blue Apron's growth story is broken, and, though they may have been necessary, they don't inspire confidence in the company's future.
Blue Apron shares tumbled again after the company reported a decline in customers and missed earnings estimates in its third-quarter report on Nov. 2. Revenue growth slowed to just 3%, and its customer count declined 6% as it cut back on marketing expenses because of logistical problems it's experienced with a transition to a new facility. Worse, the company said revenue would fall in the fourth quarter, a sign that its problems may be more entrenched than just the headaches involved in opening up a new plant.
Meanwhile, rival Hello Fresh shares soared on the company's IPO the same day, a sign that Blue Apron's challenges may be self-imposed and not due to weakness in the upstart meal-kit space. Either way, the company's prospects as a standalone company look increasingly dimmer. An acquisition may be investors' best hope.