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HelloFresh is delivering fewer meals to fewer customers, but has earned substantially more. Profit growth is the top priority for the meal box provider, according to CEO Dominik Richter.
Margin growth
HelloFresh has just published rather disappointing sales results: last quarter, the meal delivery company reached 7.3 million active customers, compared to 8 million a year earlier. The number of orders fell 7 % from 32 million to 30 million. The company delivered 253 million meals, down 6% from nearly 270 million in Q2 2022. The average order value did increase though, from 60.4 to 63.6 euros (+ 8.4 %).
As a result, sales fell 2 % in the second quarter to 1.92 billion euros (however, at constant exchange rates, there was an increase of 0.8 %). Nevertheless, HelloFresh achieved its highest-ever adjusted EBITDA: 191.9 million euros, up almost 32 % from 145.9 million a year earlier. The company owes that margin growth to operational improvements in procurement and distribution. The meal box retailer also saved on marketing, allocating a larger part of its budget to the important autumn period ahead.
Ready to eat
The figures confirm trends that have been going on for a while: after the pandemic, consumer behaviour is normalising again, and that has put an end to rampant growth for meal delivery companies. The focus at HelloFresh is therefore no longer on growth, but on margin: “Profitable growth remains our top priority going into 2024 and we expect to take advantage of opportunities as they arise”, Richter said.
Among other things, he plans to focus more strongly on the ready-to-eat business, where capacity is being expanded. The company expects growth to accelerate again in the second half of 2023 and forecasts sales growth of between 2 and 8 % for the full financial year. Adjusted EBITDA will be between 470 and 540 million euros.
