Why Blue Apron Holdings, MercadoLibre, and Chicago Bridge & Iron Slumped Today
The stock market fell sharply on Thursday, responding negatively to rising geopolitical tensions and a lack of confidence in the U.S. government's ability to follow through on promised policy initiatives. Major benchmarks finished down as much as 2.1%, with particular weakness in the technology sector. Energy prices slumped, with crude falling about $1 per barrel to drop below the $49 level, but gold and silver advanced on the rising perceived threat of potential military conflict between the U.S. and North Korea. Also hurting the market were poor performances from certain stocks, and Blue Apron Holdings (NYSE: APRN), MercadoLibre (NASDAQ: MELI), and Chicago Bridge & Iron (NYSE: CBI) were among the worst performers on the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.
Shares of Blue Apron Holdings dropped almost 18% after the food delivery service reported its second-quarter results. Revenue rose modestly from year-ago levels, but the costs of meeting rising demand climbed at a far greater pace, hurting gross margin figures and leading to extreme boosts to operating costs overall. Investors were also displeased with the fact that customer counts declined sequentially compared to the first quarter of 2017, contributing to a drop in total orders processed. Even though Blue Apron successfully cut its spending on marketing, the company now believes that revenue will actually drop in the second half of the year. For a newly public stock counting on positive word of mouth, Blue Apron's story isn't working out the way bullish investors had hoped.
Image source: Blue Apron.
Source: Fool.com