HelloFresh, a meal kit provider based in Germany, recently reported better-than-expected profit for the second quarter. The company saw a significant increase in demand for its ready-to-eat (RTE) meals, leading to impressive financial results.
HelloFresh’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached 146.4 million euros, surpassing expectations. Although revenue slightly missed forecasts, it still increased by 1.7% year-over-year to EUR1.95 billion. The average order value also rose by 4.7% to EUR66.6.
One of the standout performances was the RTE business, which experienced a substantial 45.2% revenue growth to EUR513.7 million. In contrast, meal kit sales decreased by 9.9% to EUR1.4 billion. Despite a decline in the total number of customers, HelloFresh highlighted the strong loyalty and purchasing behavior of existing customers.
Co-Founder and CEO Dominik Richter expressed satisfaction with the RTE business’s growth trajectory, emphasizing the profitability of this segment. The company’s strategic investments in product development, production capacity, and brand building have yielded positive outcomes.
To adapt to changing market dynamics, HelloFresh made adjustments to its production capacity for meal kits in North America. This decision resulted in a one-time impairment charge of EUR32 million. Despite this, HelloFresh’s stock performed well, closing up 15.9% in German trading.
Although the stock price has experienced a significant decline of about 55% in 2024, the recent financial results and strategic initiatives indicate a positive outlook for HelloFresh. The company’s focus on high-value customers and the growing demand for RTE meals position it well for future growth and profitability.
