Why the Marley Spoon (ASX:MMM) share price is sinking 22% today

This follows the food company's recent update.

| More on:

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

The Marley Spoon AG (ASX: MMM) share price has tanked 22% in afternoon trade.

Shares in the food company have been on the receiving end of some brutal selling.

The bearish price action follows Marley Spoon's recent trading update.

Let's take a look at what Marley Spoon announced and why investors are jumping ship.  

disappointed woman farmer at the decline of share price

Image source: Getty Images

Marley Spoon reports mixed quarterly update.

Marley Spoon released its update for the second quarter of FY21 following the market's close yesterday.

Judging by today's price action, the company's performance was below market consensus.

Overall, for the quarter ending 30th June 2021, Marley Spoon reported further growth, albeit at a slower rate.

The company's report was highlighted by revenue of EUR80.6 million, a 10% improvement on the prior corresponding period.

Marley Spoon's management noted that revenue growth was driven by all regions, in particular Europe.

Overall, Marley Spoon reported a first half revenue growth of 36% year on year.

The company also cited a 37% year on year increase in active users. Marley Spoon reported revenue from customers ordering 6 or more times increased to 71% for the first half.

What is weighing down the Marley Spoon share price?

As noted in a colleague's previous article, Marley Spoon's operating result could be weighing down the Marley Spoon share price.

In its update, the company cited an operating loss of EUR9 million. For the first half, Marley Spoon reported an operating loss of EUR15 million.

However, Marley Spoon has re-affirmed its 2021 net revenue guidance. The company expects net revenue growth between 30% to 35% year on year for 2021.

Marley Spoon also noted operational headwinds in the first half of 2021. As a result, the company revised its Contribution Margin (CM) to be approximately 29% in 2021, in line with CY 2020.

Snapshot of the Marley Spoon share price

Marley Spoon is the second largest subscription-based meal-kit provider in Australia. The company delivers fresh ingredients to customers in Australia, the United States and Europe.

Thanks to today's brutal selling, the Marley Spoon share price is more than 18% lower since the start of 2021.  

At the time of writing, shares in Marley Spoon are down 22%, trading at $2.17.

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Marley Spoon AG. The Motley Fool Australia owns shares of and has recommended Marley Spoon AG. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Doctor sees virtual images of the patient's x-rays on a blue background.
Share Market News

Why might Pro Medicus shares soon be under pressure?

The winners and losers from index rebalances have been named.

Read more »

Woman staring at chocolate cake.
Opinions

I love Wesfarmers shares. Here's why I'm not buying more

According to Buffett, price and value are not the same.

Read more »

Two men in business suits sit across from each other at a table with a chess board on it.
Mergers & Acquisitions

Northern Star shares tumble as takeover hopes fade

Northern Star shares fall again as takeover hopes lose momentum.

Read more »

A man flies fast through a digital space with numbers all around him.
IPOs

Elon Musk wants everyday investors in the SpaceX IPO. Is that a red flag?

SpaceX’s Nasdaq debut could test retail demand.

Read more »

Buy now written on a red key with a shopping trolley on an Apple keyboard.
Broker Notes

3 compelling reasons to buy the rebound in Coles shares today

A leading analyst expects the rebound in Coles shares could have much further to run.

Read more »

Buy, hold, and sell ratings written on signs on a wooden pole.
Broker Notes

Up 58% in a year, are BHP shares still a good buy today?

Two leading analysts offer their outlooks for BHP’s surging shares.

Read more »

Two company members shaking hands on a deal.
Mergers & Acquisitions

Could this struggling ASX 200 stock be about to receive a takeover offer?

Steadfast shares are frozen as investors wait on potential takeover news.

Read more »

Buy and sell on yellow paper with pins on them and several share price lines.
Broker Notes

Sell alert! Why this expert is calling time on Westpac and CBA shares

A leading analyst forecasts growing headwinds for Westpac and CBA shares.

Read more »