Please ensure Javascript is enabled for purposes of website accessibility

Why Blue Apron Stock Was Slipping Today

By Jeremy Bowman – Updated Apr 11, 2019 at 8:27PM

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

Shares of the meal-kit service fell on concerns that the economy may be weakening.

What happened

Shares of Blue Apron (APRN -8.43%) were sliding today alongside the broader market as the meal-kit provider's roller coaster ride continued. The stock tumbled through much of December on concerns that it could be de-listed or simply that the company will never be profitable and will eventually go bankrupt. Toward the end of the month, the stock surged on news of a new deal with WW (formerly known as Weight Watchers) for co-branded meal kits.

Though there was no significant news today on Blue Apron, pressure from the market sell-off pushed the stock down 6.5% as of 11:19 a.m. EST on Thursday.

A Blue Apron meal kit box

Image source: Blue Apron.

So what 

Blue Apron made one small announcement this morning, saying it was awarded the prestigious Safe Quality Food certification for food safety across all three of its fulfillment centers.

But that news was widely ignored. Instead, the stock seemed to fall due to the broad-market sell-off. The major news of the day was Apple's revenue guidance cut due to weak iPhone sales in China, which has no effect on Blue Apron. But other indicators showed the economy weakening, as a manufacturing activity index came in below estimates. 

Now what 

As something of a luxury product, Blue Apron would be particularly vulnerable to a recession, especially since the company is already losing customers and remains unprofitable. If its customers feel the economy weakening, it's easy enough for them to cancel their subscriptions and simply save money by buying groceries at the supermarket like most Americans do.

The first quarter is also seasonally Blue Apron's strongest as the company capitalizes on New Year's resolutions, along with cold weather that keeps more Americans inside and cooking, rather than going out to eat. That means that any economic warnings now are especially risky for the company.

With the stock flirting with the $1 mark, the shares should continue to be volatile over the coming months as the macroeconomic outlook comes into focus and investors see if Blue Apron can deliver adjusted EBITDA profitability this year, as management has promised.

Check out the latest Blue Apron earnings call transcript.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. 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 Holdings, Inc. Stock Quote
Blue Apron Holdings, Inc.
$0.99 (-8.43%) $0.09
Apple Stock Quote
$144.22 (-2.63%) $-3.89
WW International, Inc. Stock Quote
WW International, Inc.
$3.86 (-6.99%) $0.29

*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 11/29/2022.

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.