HelloFresh shares dive 42% after meal kit giant warns on outlook

HelloFresh shares plunged 42% on Friday morning in their worst-ever session to date, after the recipe box delivery company disappointed with its 2024 earnings outlook.

Analysts at UBS said that while they had flagged risks around HelloFresh’s guidance, its outlook, released after the market close on Thursday, was “far worse” than anticipated. Disappointing growth and adjusted earnings forecasts indicated elevated customer acquisition costs are “expected to persist in 2024,” they said in a note.

Deutsche Bank, meanwhile, called the outlook for 2024 “disappointing” and noted the removal of its previously announced targets for 2025, which the company attributed to a “very different operating environment.”

The Berlin-based firm on Thursday said it expected adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to come in at 448 million euros ($480 million) for fiscal 2023, down from 477 million euros the year before. 

It also revealed it expects adjusted EBITDA in 2024 to fall to between 350 million and 400 million euros, despite a forecast for higher revenue from the North American market.

The lower earnings will be due to increased production capacity and marketing expenses, and a ramp-up of two new fulfillment centers, the company said.

Its annual results are due to be released on Mar. 15.

HelloFresh listed in Frankfurt in 2017 and proved a clear pandemic beneficiary, with shares climbing rapidly as investors spied opportunities in tech platforms providing door-to-door services.

But its value has tumbled since its peak in 2021, with shares down 70% in 2022 and down 30% in 2023.