Marley Spoon shares plunge after growth slows as consumers dine out again
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As COVID-19 restrictions ease, consumers are returning to dining out to get a feed and that hasn’t been good news for shareholders of Marley Spoon (ASX:MMM).
The meal kit delivery company saw a surge in demand amid COVID-19, thanks to the closure of restaurants in its key markets in Australia, North America and Europe.
While many of the company’s financials figures were still above pre-COVID highs, the same growth that had been seen last year was starting to disappear.
Marley Spoon still expects revenue growth of 26-28%, it had previously tipped 30-35% and made 38% growth in the first half of 2021.
On a group-wide basis it finished with its earnings Є13 million in the negative.
While Australia saw a 30% rise compared to 12 months ago, Europe only grew 15% and North America just 3%.
In the latter two markets it blamed “post-lockdown holiday-related customer behaviour”, inevitably alluding to people returning to activities missed during the pandemic such as dining out.
While the company admitted cost blowouts, it said these laid the foundation for further growth and was fully funded into 2022.
“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 economies,” said CEO Fabian Siegel.
Marley Spoon shares fell 30% this morning making it easily the biggest loser among stocks releasing quarterlies.
The company is still in the green compared to February 2020 but is now below the $1.42 price it listed at back in 2018.
Marley Spoon is far from the only food delivery stock whose shareholders have a rough time.
Australian founded Youfoodz (ASX:YFZ) joined the ASX at the end of last year and lasted just 7 months before being taken over at a hefty discount to its listing price.
The one other company left is My Food Bag (ASX:MFB) – which joined the ASX in March this year – and it too has always traded below water to its IPO price.
Marley Spoon is of course far from the only company affected by people returning to pre-COVID norms – Amazon (NDQ:AMZN) is one other stock although its shares suffered a far less detrimental impact.
Van Eck’s Jamie Hannah said Amazon’s results – which fell short of analyst expectations,” indicate[d] that the COVID boost to online sales is starting to trail off.”
“While they’re still a powerhouse in online shopping, they are certainly under pressure to continue growth moving into 2022,” he said.