German meal-kit maker HelloFresh has reported lower than expected third-quarter core earnings and a decline in customer numbers, a day after announcing a €150 million buyback of shares and certain convertible bonds.
Quarterly adjusted core profit (AEBITDA) came in at €69.2 million, down 3.7% year-on-year, and slightly below analysts' average estimate of €70.0 million.
The Berlin-based company, which like other food delivery firms was a big winner during pandemic lockdowns, has had to increase spending on marketing to retain customers as economies have reopened and inflation surged.
Quarterly active customers declined to 7.1 million from 7.3 million in the previous quarter, and dropped 5.9% year-on-year.
Average Order Value
Average order value reached a record €64.20, the firm said, driven largely by customers buying more meal kits per order as the company expanded its range of recipes.
The figure was also helped a little by price increases introduced last year, HelloFresh said in a media call.
Revenue in the three months ended Sept. 30 came in at €1.80 billion, down 3% year-on-year and below analysts' average estimate of €1.83 billion, hit by a stronger euro against the dollar and some other currencies.
On a constant currency basis, revenue was up 3.5% year-on-year. HelloFresh's biggest market is North America, which made two-thirds of group sales in the quarter.
Ready To Eat
HelloFresh is "heavily focusing" on ramping up its new ready-to-eat (RTE) category, CEO Dominik Richter said, adding in a call that it plans to expand the menu from 35 meals to 50 in the next year and bring the service to new markets.
HelloFresh expects RTE to reach the revenue level of the meal-kit business over the next 10 years, Richter said.
The company confirmed its full-year forecast for adjusted core profit of €470 million to €540 million, and revenue growth of 2% to 8% at constant currencies.