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Blue Apron Stock Is Now Worth Far Less Than One of Its Meals

  • Startup lost customers in first report as public company
  • Meal-kit company pared back marketing costs, boosted revenue

Less than two months after going public, Blue Apron Holdings Inc.’s shares have fallen almost 50 percent to about $5 -- less than the price of one of its meals -- as the company struggles to persuade investors that it can win the hearts of America’s cooks.

In its first earnings report as a public company, Blue Apron managed to beat analysts’ estimates on revenue, but that was the only good news. The company said it didn’t raise as much as it expected in the IPO and also cut deeply into the marketing budget. The result: it lost customers during the quarter. In a conference call, Blue Apron executives warned that the second half will be even worse than the first as the company spends heavily on automating its fulfillment centers and continues to pull back marketing. That in turn will push back plans to expand menu offerings.

“These complexities have arisen within the last month,” said Chief Financial Officer Brad Dickerson, adding that the delays and additional associated costs are hurting efforts to attract and retain customers. “Because of these factors, we’ll be reducing our marketing spend in the back half of the year, an obvious additional impact to...