While sales of meal kits continue to decline, HelloFresh does manage to sell a lot more prepared meals. The company is attracting fewer new customers, but existing customers are spending more.
Different directions
HelloFresh achieved a slight sales growth of 0.9 % to 1.95 billion euros in the second quarter of this year, but that figure masks that the company is going in two different directions at the same time. While sales of meal kits went down 9.3 % to 1.4 billion euros, prepared meals grew a whopping 45 % to 519 million euros. The investments in that new meals division are paying off, CEO Dominik Richter points out.
The company delivered nearly 244 million meals, which is 3.9 % down from last year. The number of orders fell by 3.6 % to 28.9 million, but the average value per order did increase by 5.6 % to 67.10 euros per order. This is in line with the group’s strategy, which focuses more heavily on high-value customers: fewer new customers are coming in, but existing customers are spending more.
Guard margins
Adjusted EBIT fell from 192 to 146 million euros due to the costly start-up of new production sites, but that effect is temporary. HelloFresh is optimising its cost structure and reducing price discounts to guard margins.
The group’s margin of 7.5 % is slightly better than expected. Traditional meal kits give the company a 12.2 % margin, while prepared meals have a 4.0 %margin due to the large investments in this category.
HelloFresh is still confident that sales for the full year will increase by 2 to 8 % and that adjusted EBIT will be 350 to 400 million euros.
