Shares in the German meal-kit maker, HelloFresh, experienced a 5.6% decline at EUR22.65 following the announcement of a decrease in active customers in the second quarter. While the company reported better-than-expected adjusted earnings for the quarter, it revised its revenue-growth outlook for 2023 downward.
Despite a higher average order value, HelloFresh noted a high single-digit percentage decline in active-customer count in Q2. As a result, the company anticipates a drop in second-quarter revenue to EUR1.92 billion from EUR1.96 billion, missing consensus expectations.
For the full year, HelloFresh expects revenue growth at constant currency to range between 2% and 8%, compared to the original projection of 2% to 10%. While the company continues to strive for growth in active customers by year-end, analysts suggest that the decline in customer numbers during Q2 poses a challenge for the remaining half of the year.
HelloFresh attributed its improved profitability during the quarter to reduced marketing spending. The company forecasts adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the quarter to be between EUR185 million and EUR195 million, surpassing consensus estimates. For the full year, HelloFresh anticipates adjusted EBITDA to range between EUR470 million and EUR540 million.
Jefferies analysts noted that investors will appreciate the strong performance in adjusted EBITDA during the quarter but may question the limited impact on profitability for the fiscal year. HelloFresh plans to increase marketing spend in the third and fourth quarters to address these concerns.
Overall, HelloFresh faces headwinds with its customer base in Q2 and revises its future revenue forecast accordingly.