New York — Shares of Blue Apron closed Wednesday at $1.05, close to levels that could eventually lead to the meal kit company's delisting from the New York Stock Exchange.
Blue Apron said this week that its customer count dropped 30 percent from a year ago, to 550,000. Total orders fell 29 percent in the first quarter, compared with 2018. The struggling New York company has shifted its strategy to focus on customers more likely to remain loyal and who spend more per meal.
That has happened and customers are spending more per meal. But it's not been enough to offset falling customer numbers. If the stock slips below $1 and stays there for 30 consecutive days, it will be threatened with a delisting under NYSE rules.
To grow, the company began selling kits through Walmart's Jet.com and it's partnered with Weight Watchers. It's also testing a same-day delivery service. In an earnings call with analysts on Tuesday, Blue Apron Chief Financial Officer said the company plans to launch a shop on Jet over the next few weeks that will sell a wider range of products, including spices.
Growth remains challenging
Stock watchers at Raymond James say building a larger customer base will be a challenge without sustained ad spending. "Customer growth remains challenging near-term as Blue Apron reduces marketing spend and focuses on acquiring more profitable customers," analyst Aaron Kessler said in a research note.
Blue Apron helped kick off the meal kits craze in the U.S., but it's now facing increased competition from both stores and online rivals. Kroger and Albertsons have acquired meal kit companies to sell in their supermarkets.and inside its Amazon Go cashier-less stores.\
"An intensely competitive environment and lack of visibility into the near-term execution strategy keeps us on the sidelines," SunTrust Robinson Humphrey analysts said in a client note after Blue Apron reported earnings this week.
For its latest quarter, Blue Apron reported revenue of $141.9 million, down from $196.7 million in the year-ago period. Its net loss shrank from $31.6 million a year ago to $5.3 million.
Blue Apron shares have fallen 89% in the two years since it made its. In early April it hired former Etsy executive Linda Findley Kozlowski to replace Brad Dickeson as CEO. The company's co-founder and chief technology officer, Ilia Papas, also left the company that month.