:max_bytes(150000):strip_icc()/GettyImages-2166092743-efda35565cf94e0eb6ca5630cafab28b.jpg?w=1024&resize=1024,1024&ssl=1 "HelloFresh Stock Soars as Ready-to-Eat Meals Boost Profit")
Key Takeaways
- HelloFresh beat profit forecasts as sales of the company’s ready-to-eat (RTE) meals soared.
- The Germany-based meal kit provider said RTE revenue was up 45.2% year-over-year, while meal kit revenue fell 9.9%.
- HelloFresh noted that while the total number of customers declined, existing customers “continue to show robust behavior.”
HelloFresh posted better-than-expected second-quarter profit as demand for the meal kit provider’s ready-to-eat (RTE) offerings boomed.
The Germany-based firm reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of 146.4 million euros ($160.4 million), beating expectations. Revenue was up 1.7% year-over-year to EUR1.95 billion ($2.14 billion), just short of forecasts.
On a constant-currency basis, HelloFresh’s average order value was up 4.7% to EUR66.6 and RTE revenue jumped 45.2% to EUR513.7 million, but meal kit sales dropped 9.9% to EUR1.4 billion.
RTE Business on ‘Profitable Growth Trajectory’
Co-Founder and Chief Executive Officer (CEO) Dominik Richter said the RTE business “continues on its structural and profitable growth trajectory. Our investments in our product, production capacity and brand are paying off.”
The company noted that since shifting its focus to high-value customers, the total number of customers dropped. However, it added that existing customers “continue to show robust behavior,” producing higher year-over-year order rates and retention. HelloFresh also noted that it initiated moves to “rightsize its production capacity” for meal kits in North America, leading to a non-recurring, non-cash impairment charge of EUR32 million.
HelloFresh shares closed up 15.9% in German trading at EUR6.26. Still, they are down about 55% in 2024.
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