HelloFresh SE fell a record 25% on Thursday, erasing €886 million ($964 million) of market value, after the meal-kit delivery company stunned investors by cutting guidance only three weeks after reiterating its targets.
The Berlin-based firm, whose shares more than quadrupled during the pandemic as housebound customers ordered more food online, blamed fewer new customers in the US, as well as difficulties at its production facilities such as staffing “challenges” and water shortages.
“The challenges in both ready-to-eat facilities have been largely resolved by now but will result in an adverse profit contribution versus the previous plan,” HelloFresh said in a statement.
While the company doesn’t expect a meaningful impact on its outlook for 2024, it cut its 2023 adjusted Ebitda outlook to a range of €430 million to €470 million, down from the €470 million to €540 million it had confirmed just last month. That compares with an average estimate of €483.2 million by analysts surveyed by Bloomberg.
A guidance cut so soon after earnings caught analysts off-guard. JPMorgan’s Marcus Diebel said that management is likely to face investor questions about the visibility of the business.
“We still struggle to see what exactly changed in the 2-3 weeks post-results,” Bernstein analyst William Woods said in a note, adding that he expects “ambitious” consensus expectations for HelloFresh’s performance in outer years to be revised downwards.
Read More: HelloFresh Slumps by Record on Surprise Warning: Street Wrap
HelloFresh shares have now given back all their pandemic gains and have more than halved in value over the past two months. Losses gathered pace after third-quarter results missed estimates. Worries over inflation hitting consumer wallets and the rising cost of ingredients have all played their part.
“Boosting marketing may support user additions, but meal-kits’ relative affordability must lure less-affluent clients to fuel growth,” said Bloomberg Intelligence analyst Diana Gomes.
--With assistance from Henry Ren.
(Updates share prices and market cap values throughout; a previous version of the story corrected the estimate for 2023 adjusted Ebitda.)
