GDANSK (May 4): HelloFresh's shares slumped nearly 8% on Tuesday as investors worried about post-pandemic prospects for the German meal-kit delivery company, although its quarterly earnings were in line with its forecasts and it reaffirmed its 2021 outlook.
The Berlin-based company, like US-based peer Blue Apron and takeaway food groups Delivery Hero and Just Eat Takeaway, has been riding an e-commerce boom brought on by Covid-19 lockdowns.
But analysts said the company, which delivers pre-portioned meal ingredients with recipes to its customers, needed to give more details about how it would retain customers in future as more people started dining out again.
Its shares were down 5% at 1043 GMT, although they have still gained more than 250% since the start of 2020.
Chief financial officer Christian Gaertner told analysts the share of subscription reactivations for the meal-kit service were below pre-pandemic levels but said this was mainly because new customer activations had been so high.
HelloFresh's customer retention rate improved as it invested in better pricing and offered more meal options, chief executive Dominik Richter told the call.
Barclays said growth in the United States, HelloFresh's main market, was mostly driven by increases in order frequency and average order value, which could be hit as coronavirus restrictions ease. It said this was "something bears will pick at".
The company said it still had to actively steer demand in a few markets, such as Germany and the United States, due to capacity constraints.
"Our teams have been working hard to de-bottleneck the capacity constraints we were experiencing over the majority of 2020, especially in our US market," Richter said in a statement.
HelloFresh reported adjusted earnings before interest, taxes, depreciation, and amortisation of €159.2 million (US$191.64 million), up from €63.1 million a year earlier and in line with its previous forecast of €155 million to €165 million.