German meal-kit company HelloFresh said it expected its profit to rise but revenue to fall in the current year, as it reins in marketing spending to reduce costs and prioritises high-value customers over volume.
The company said it would extend its cost-cutting programme, announced in the second half of last year, until 2026, as it focuses on long-term profitability and free cash flow growth.
The programme, which targets improvements in productivity and a higher return on marketing investments among others, will include some job cuts related to the closure of fulfilment centres, CEO Dominik Richter told Reuters, without specifying at which locations or the number of employees affected.
A BBC report said in October that HelloFresh was shutting down a distribution centre in Britain, affecting 900 employees.
The company forecast constant-currency revenue to decline by between 3% and 8% this year, compared to a 0.9% increase in constant-currency terms to around 7.66 billion euros ($8.30 billion) in 2024.
Analysts in a company-provided poll had estimated an average 2.7% increase.
Forecasts
HelloFresh targets an increase in adjusted earnings before interest and taxes (EBIT), excluding impairment, to a range of €200 million to €250 million in 2025, from €136 million in 2024, helped by cost cuts and 'significant investments into the company's physical and digital product,' it said in a statement.
A simplification of its meal-kit production capacity triggered a one-off non-cash impairment of €182 million in 2024, it said.
It expects its adjusted core profit (AEBITDA) to be between €450 million and €500 million in 2025, up from €399 million last year.
In North America, it anticipated that revenue would decline more than the group's overall revenue, due to cuts in spending on marketing of its meal kits and weakening consumer confidence.
The company is due to publish its annual report on 13 March and hold a capital markets day on 20 March.
