The meal kit retailer HelloFresh is preparing for difficult years. The reluctance of customers is putting a strain on the listed company. According to preliminary figures, in 2023 the adjusted operating profit fell from 477 to 448 million euros. The board is distancing itself from its medium-term goals; the operating margin target previously set for 2025 is only likely to be achieved in the long term.
In addition, CFO Christian Gärtner announced in a conference call with analysts that HelloFresh will no longer publish the number of active customers quarterly from the first quarter of 2024. Investors didn’t like the news at all. The HelloFresh share price collapsed by 46 percent to 6.35 euros on Friday morning. For comparison: At the peak of the corona pandemic it was almost 100 euros.
On Thursday evening, HelloFresh announced in Berlin that the medium-term goals were unlikely to be achieved. So far, CEO Dominik Richter and Gärtner had committed to achieving sales of ten billion euros by 2025. Ten percent of this – or one billion euros – should remain as earnings before interest, taxes, depreciation and amortization (Ebitda) adjusted for special effects. There is no trace of a new medium-term forecast.
Peak in pandemic times
CEO Richter continues to build on the hopeful Ready-To-Eat, the segment around ready-to-eat meals. The manager hoped that the takeover of the US company would provide a second pillar to the main business with meal kits. HelloFresh grew up with pre-portioned ingredient packages. Business increased particularly during the corona pandemic, when lockdowns and fear of infections made going out more difficult.
Since then, demand has waned and even long-term discount campaigns can hardly convince customers. Richter therefore wants to change the strategy: According to previous information, the ready-to-eat food division should become the company’s largest by 2025.
Things are looking poor for the former sales driver of meal kits: HelloFresh says it is currently recording a loss in sales in the high single-digit percentage range. As the year progresses, the sales and revenue gap is likely to become increasingly smaller. Adjusted operating profit is expected to collapse to 350 to 400 million euros over the course of the year.
