Meal-kit maker HelloFresh has reported a smaller-than-expected decline in first-quarter core earnings as it saw customers return to its service, offsetting high seasonal marketing and procurement costs.
Quarterly adjusted core profit (AEBITDA) fell 33.4% to €66.1 million but beat analysts' average estimate of €47.5 million in a company-provided poll.
'Expand The Proposition'
"Our main focus is now to further expand our customer proposition," chief executive Dominik Richter said in a statement, as the company seeks to further drive profitability in its meal-kit business while expanding its newest ready-to-eat (RTE) segment, which delivers pre-prepared food.
HelloFresh aims to launch RTE in the Benelux region towards the end of the third quarter this year, Richter said in a media call, and to launch it in other European markets in 2024.
The number of active customers in the first quarter declined by 4.8% to 8.11 million from the same period last year, when the business was still enjoying a lockdown boom, but was up from 7.11 million in the previous quarter.
Marketing expenses as a percentage of revenue, excluding share-based compensation costs, rose by 2.8 percentage points to 20.4%, due to seasonal sequential growth in customers and normalised spending compared to a year earlier, the company said.
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Revenue rose 5.3% to €2.02 billion in the quarter, close to analysts' estimate of €2.03 billion. Sales were driven by growth in the North America segment, which from the start of this year has included the company's Canadian operations, previously part of its international segment.
Richter said joining the two operations, which have increasingly worked together in the past couple of years, should lead to some savings on sourcing of ingredients, packaging, and logistics.
The German company confirmed its full-year forecast for an AEBITDA of €460 million to €540 million, and revenue growth of between 2% and 10% on a constant-currency basis.