Please ensure Javascript is enabled for purposes of website accessibility

Why Blue Apron Holdings, Inc. Stock Plunged 28% in March

By Jeremy Bowman – Updated Apr 10, 2018 at 6:35PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Blue Apron's prospects went from bad to worse last month.

What happened

Shares of Blue Apron Holdings, Inc. (APRN -5.06%) tumbled last month as the meal-kit service continued to face a rising tide of competition across multiple fronts. Competitor news overshadowed the company's decision to change up its business model and begin selling its meal kits inside supermarkets. The stock finished the month down 28%, according to data from S&P Global Market Intelligence.

As the chart below shows, shares moved steadily lower over the course of the month on a steady drumbeat of bad news.

APRN Chart

APRN data by YCharts.

So what

The trouble started for Blue Apron early in the month after Walmart, the nation's largest grocer, said it was planning to sell its own meal kits in its stores. Walmart said it was testing prepared meals at 250 stores at a price of $8 to $15 for two people, significantly cheaper than Blue Apron's prices, which start at $9 per person per meal. Later that week, the stock tanked again on news that Weight Watchers was launching its own meal kits in stores, yet another sign that meal kits were moving toward commodity status.

A dish of chicken thighs cooked with beans and tomatoes

Image source: Blue Apron.

News that the company was planning to sell its own meals in supermarkets briefly stemmed the bleeding, but it also led to more questions about the viability of the company's core subscription service. 

Finally, a strong earnings report from rival Hello Fresh at the end of the month added to the pressure on the company as Hello Fresh looks set to top Blue Apron in sales in the U.S.

Now what

Blue Apron shares continued to slide through April, losing 8% through April 10 as supermarket chain Albertson's said it would begin offering meal kits from Plated, the company it acquired last year, in its stores. 

It's hard to believe Blue Apron has been public for less than a year. So much has changed in the meal kit industry as a number of companies have consolidated and big chains like Walmart and Amazon-Whole Foods are eyeing the space. Blue Apron has also had a hand in its demise with its own unforced errors. At this point, it looks like the only thing separating the company from competition is its brand, and considering revenue is now declining, that brand looks weak. With the stock now below $2, shares could still head lower.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Blue Apron Stock Quote
Blue Apron
$3.00 (-5.06%) $0.16
Walmart Stock Quote
$134.25 (1.30%) $1.72, Inc. Stock Quote, Inc.
$121.09 (4.50%) $5.21

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.