Marley Spoon (ASX:MMM) share price crashes 34% to new 52-week low

A downward revision is spooking investors. We have the details

| More on:
Displeased and shocked emotional young friends cooking in the kitchen.

Image source: Getty Images

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 is tanking. The massive price drop comes after the meal kit subscription service gave an update for the September quarter.

At the time of writing, shares in the company are trading for $1.04 – down 31.1%. Earlier, shares hit an intraday and 52-week low of 99 cents per share, which is a 34.4% pummelling.

Let's take a closer look at the news.

Why the Marley Spoon share price is in freefall

The Marley Spoon share price is heading south and it comes after the company's Q3 FY21 update, released after the market closed yesterday.

What is seemingly spooking investors is the downward revision of its full-year net revenue. The company blames "volatile consumer behaviour" for the downward growth rate of only 26-28% as opposed to the previously advised 30-35%.

Specifically, the company says "staffing challenges, higher labour rates, and food cost inflation are continuing to impact contribution margin". This is in addition to "extensive" summer holidays from Europeans enjoying leisure activities after months of lockdown. Apparently, this resulted in "higher skip rates and lower acquisition volume".

As well, Marley Spoon advised revenue grew 14% on the prior corresponding period (pcp) to 79.2 million Euros ($112.8 million) and a total cash position of 33 million Euros ($51.1 million) – up 17% on the pcp.

Compared with net revenue from its H1 21 update – which grew 38% — this is a massive downgrade in growth projections.

Management commentary

Commenting on the update likely driving down the Marley Spoon share price, CEO Fabian Siegal said:

Q3 net revenue growth is broadly in line with our expectations and an acceleration vs. the last quarter. Nevertheless, volatile customer behaviour during the Northern Hemisphere summer resulted in higher-than-normal skip rates and a higher cost acquisition environment. In order to maintain attractive unit economics, we reduced customer acquisitions, which will impact Q4 and therefore require us to revise our 2021 net revenue growth to 26-28%.

We have since seen a recovery in base behaviour and improved customer acquisition costs. Given these factors, Q4 net revenue growth is trending higher than Q3 2021 and the PCP. The overall structural growth trend for online groceries remains intact and gives us confidence that we will continue to sustain high growth rates at attractive unit economics.

In Q4 we expect continued revenue growth and expanded margins to lead to a significantly lower level of operating EBITDA [earnings before interest, taxes, depreciation, and amortisation] losses vs. Q3.

Marley Spoon share price snapshot

Over the past 12 months, the Marley Spoon share price has crashed by around 60%. Year-to-date it is down by a similar percentage.

Marley Spoon has a market capitalisation of approximately $302 million.

Motley Fool contributor Marc Sidarous 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 Consumer Staples & Discretionary Shares

Man with a hand on his head looks at a red stock market chart showing a falling share price.
Consumer Staples & Discretionary Shares

Why are Cettire shares crashing 27% today?

Things aren't looking good for this online luxury products retailer.

Read more »

Young lady in JB Hi-Fi electronics store checking out laptops for sale
Consumer Staples & Discretionary Shares

Does Macquarie prefer Harvey Norman or JB Hi-Fi shares?

Here’s what this broker has to say about these consumer discretionary companies. 

Read more »

Happy couple doing grocery shopping together.
Consumer Staples & Discretionary Shares

What does Macquarie think Woolworths and Coles shares are worth?

Should investors be interested in supermarket stocks?

Read more »

A man looking at his laptop and thinking.
Broker Notes

Up 17% in 2025, how much more upside does Macquarie tip for Metcash shares?

Following Tuesday’s merger and earnings news, Macquarie changed its rating for Metcash shares.

Read more »

Woman calculating dividends on calculator and working on a laptop.
Consumer Staples & Discretionary Shares

$10,000 invested in these consumer discretionary shares 5 years ago is now worth…

These ASX 200 companies have given investors big returns.

Read more »

Couple looking very happy while shopping at a home improvement store.
Dividend Investing

Focused on pasive income? Check out this defensive ASX 200 dividend stock

A leading expert says this quality ASX 200 dividend stock remains ‘undervalued’.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Consumer Staples & Discretionary Shares

Guess which ASX 200 share is pushing higher on guidance update

This wholesaler is expecting earnings ahead of consensus estimates in FY 2025.

Read more »

Happy man on a supermarket trolley full of groceries with a woman standing beside him.
Consumer Staples & Discretionary Shares

$10,000 invested in Coles shares one year ago is now worth…

Atop its 3.2% dividend yield, Coles shares have posted impressive gains over the year.

Read more »