HelloFresh has reported better-than-expected second-quarter core earnings, as the German meal-kit maker posted a 45% growth in constant currency in its ready-to-eat segment.
With pandemic hobby cooking no more and growth in its staple meal kits dwindling since the end of the lockdowns, HelloFresh is betting on its fledgling ready-meal branch to sustain growth.
Adjusted earnings before interest, taxes, depreciation and amortisation (AEBITDA), or adjusted core profit, fell 23% to €146.4 million in the second quarter, but beat analysts' average estimate of €123 million.
Despite improving quarter-on-quarter, margins were impacted by ramped-up costs at certain production sites, the company said.
It faced a non-recurring, non-cash impairment charge of €45 million in the first half, due to a readjustment of its core meal-kits business in North America, its main market.
'Optimise Our Cost Base'
"As the meal-kit category consolidates around a new market size in the near term, we are determined to optimise our cost base and adjust to the new normal," chief executive Dominik Richter said in a statement to accompany the group's results.
"This includes streamlining capacity, re-examining capital expenditure plans and leveraging existing fulfilment centres."
The company will target high-quality customers and reduce price incentives as it aims for long-term profitability, Richter said.
Meal Kits
Meal kits still represented the core part of the business, with a 72% share of revenue in the April to June period.
“Our ready-to-eat business continues on its structural and profitable growth trajectory. Our investments in our product, production capacity and brand are paying off,” Richter added.
Additional reporting by ESM
