German meal-kit maker HelloFresh provided a 2024 core earnings forecast way below expectations, shocking the market for a second time in five months after a profit warning last year.
It also scrapped its mid-term revenue and profit guidance, citing tougher market conditions and sending its shares plunging.
The Berlin-based company had been aiming for €10 billion ($11 billion) in revenues and €1 billion in adjusted core profit (AEBITDA) in 2025. It did not give a new date for those goals.
It said 2024 core earnings would be hit by higher marketing expenses and the costs of ramping-up in its ready-to-eat business.
HelloFresh now expects adjusted earnings before interest, taxes, depreciation, and amortisation of €350-€400 million ($383-$437 million) this year, 29% below analysts' forecast under the rosiest scenario, according to a company-provided consensus.
A Second 'Shocker'
At 07:33 GMT, the company's shares were down 24% in premarket trade, with a local trader describing the 2024 guidance as a second "shocker" after a November warning.
J.P. Morgan said in a note that management's recent poor track record in providing reliable guidance meant investors were likely to shun the stock until results improve
A pandemic-era darling, which like other food delivery firms was a big winner during the COVID lockdowns, HelloFresh had to increase its marketing costs to retain customers as economies reopened and inflation surged.
The company will publish its annual report on 15 March.
In November 2023, the meal-kit maker said that its North American business was hit by lacklustre customer growth in the key US market, a slower ramp-up of its ready-to-eat production facility in Arizona due to water supply and staff shortages, and longer than expected maintenance works at its Illinois site.
