HelloFresh warns on profits, shares plunge

Shares in HelloFresh plummeted on Friday, after the food delivery service warned on profits for the second time and scrapped its mid-term targets.

The German firm said that based on trading in the first weeks of the current fiscal year, core earnings in 2024 were unlikely to match 2023’s results.

Instead, it now expects adjusted earnings before interest, taxes, depreciation and amortisation to come in between €350m and €400m, well below analyst forecasts.

It is the second time HelloFresh, which provides meal kits as well as ready-to-eat food, has warned on profits in five months.

The Berlin-based business also scrapped the mid-term targets. It had been targeting revenues of €10bn and €1bn in adjusted EBITDA by 2025, but said the operating environment was now "very different" compared to when they were set.

As at 0945 GMT, the stock had plunged 45%.

HelloFresh, which is due to publish year-end results next week, said 2023 revenues would be largely flat at €7.6bn while adjusted EBITDA fell to €448m from €477m.

The company saw demand surge during the pandemic. Since then, however, demand has fallen back while competition and costs have both grown.