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 ASX Share Market News

A woman's hand draws a stylised 'Top Ten' on a projected surface.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a mild but positive start to the week's trading today.

Read more »

A man surrounded by huge piles of paper looks through a magnifying glass at his computer screen.
Opinions

CSL shares are back near $180. Here's the level I'm watching

CSL shares are nearing a key technical level after a strong rebound.

Read more »

A girl is looking very confused, with one eyebrow raised saying what?
Capital Raising

Why is this ASX lithium stock crashing 10% on Monday?

A big update has put this lithium stock in focus.

Read more »

Sell written several times on board.
Broker Notes

Sell alert! Why this expert is calling time on Tabcorp and NAB shares

A leading expert believes Tabcorp and NAB shares are likely to underperform into 2027.

Read more »

Woman and man worker in quarry on excavation machine looking at a clipboard.
Broker Notes

Buy, hold, sell: Orica, GQG Partners, BHP shares

Let's start the week with some new ratings from the experts

Read more »

Woman using her laptop with her feet up.
Broker Notes

This ASX 200 stock just received a fresh buy rating and is tipped to climb 15%

This stock is set to keep rising.

Read more »

Smiling man paying for his order from his phone on an EFTPOS machine at a restaurant.
Broker Notes

Ord Minnett tips this ASX financials stock to double within the next 12 months 

This stock offers a big yield and big upside.

Read more »

A group of market analysts sit and stand around their computers in an open-plan office environment.
Broker Notes

Buy, hold, sell: Coles, NAB, CSL shares

Here's what Dylan Evans from Catapult Wealth thinks of these three ASX 200 shares.

Read more »