HelloFresh sees growth pick-up in second-half after rise in Q2 core profit

By Linda Pasquini and Ozan Ergenay

(Reuters) -German meal-kit maker HelloFresh said on Thursday it expects growth to re-accelerate in the second half of this year, as it reported a 31.5% rise in its second-quarter core earnings from operational efficiencies and controlled marketing spends.

The expansion of production capacity for its ready-to-eat (RTE) brand Factor and the roll-out of some product improvements, as well as comparatively easier benchmarks, will help growth, the company said.

Quarterly adjusted core profit (AEBITDA) rose to 191.9 million euros ($210.7 million), from 145.9 million euros a year ago and at the upper end of its previously forecast range of 185 million-195 million euros.

An increase in the average order value also contributed to a rise in core profit, the company said.

Active customers, however, declined 8.7% in the quarter to 7.3 million.

HelloFresh, which like other players in the sector is facing higher marketing costs as it seeks to retain customers amid reopening economies and weaker consumer spending, has benefited from stronger average order value due to inflation and higher prices for products it markets under different brands.

It said in April it aimed to launch RTE in the Benelux region towards the end of the third quarter and in other European markets in 2024.

"Profitable growth remains our top priority going into 2024 and we expect to take advantage of opportunities as they arise," CEO Dominik Richter said in a statement.

The company confirmed its full-year forecast released in July of adjusted EBITDA between 470 million and 540 million euros, and revenue growth of 2%-8% on a constant-currency basis.

($1 = 0.9106 euros)

(Reporting by Linda Pasquini and Ozan Ergenay in Gdansk, edited by Himani Sarkar and Subhranshu Sahu and Sonia Cheema)