(Bloomberg) -- Blue Apron shares have a ways to go before they erase this week’s loss as yet another competitor makes plans to enter the meal-kit space.
Even as shares rallied Friday, gaining as much as 14 percent, they’re not likely to recover from steeper declines this week. The meal-kit maker is on track for its worst week since November, based on closing prices, and still has another 16 percent of downside to recoup since the start of the week.
The company was hit with a double whammy as Weight Watchers International followed in Walmart Inc.’s footsteps earlier this week, announcing a line of “quick prep” kits and sending Blue Apron shares down another 16 percent Thursday to a record low and adding to losses after Walmart’s Monday announcement. And last week rival Home Chef, which also sells kits on Walmart’s website, said its plan to differentiate itself from Blue Apron’s foodie culture and offer meal kits that are more "approachable," helped it more than double its annual revenue.
Keybanc’s Ed Yruma said there’s a “constant litany of competitors entering the meal kit market,” and he expects questions will be raised around whether Blue Apron’s trends start to shift and if its revenue can recover. Analysts currently expect first-quarter revenue to grow by about $10 million compared to the fourth-quarter results, its first sequential growth since the company’s trading debut last June.
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