Under normal circumstances, a stock like Tattooed Chef (NASDAQ:TTCF) that focuses on pre-packaged meals should do well. After all, people love the convenience of a halfway-decent heat-and-eat meal. But that wasn’t the case for Tattooed Chef, whose earnings report proved unappetizing and whose share price slipped over 25% in Tuesday afternoon’s trading.
Tattooed Chef’s earnings report didn’t bring in much for investors to cheer about. Its earnings were negative, posting -$0.23 per share. Worse, its revenue also proved disappointing. Though it came in at $59.09 million, that was down 12.7% against the previous year. Worse, analysts were expecting Tattooed Chef to post $65.18 million in revenue, which makes it a failure against that metric too. In a case of adding insult to injury, these losses still happened despite Tattooed Chef lowering its operating expenses by 37% in the last year.
Tattooed Chef management blamed inflationary pressures for its woes, noting that everything from raw materials to packaging went up in cost. CEO Sam Galletti said that Tattooed Chef is focusing now on profitability over growth, which means a more long-term focus and probably some losses in the meantime. Just to round out the disaster, Tattooed Chef also revealed it would miss its quarterly report deadline as established by the SEC and that it’s going to need to start raising capital soon.
News like that explains the last five days in trading nicely for Tattooed Chef stock. Things were going along fairly smoothly, if on a fairly slight downhill slope until the bad news arose that sent the bottom dropping out. Now, it’s not only experiencing huge downturns percentage-wise, but it’s also back on the generally downhill slope.
