HelloFresh up on home cooking
The share price of meal-kit delivery firm HelloFresh jumped to a record high on Tuesday after it said it expected strong first-quarter sales and profit due to a surge in demand as coronavirus lockdowns prompt more people to cook at home.
The share price of meal-kit delivery firm HelloFresh jumped to a record high on Tuesday after it said it expected strong firstquarter sales and profit due to a surge in demand as coronavirus lockdowns prompt more people to cook at home.
HelloFresh shares were up 14.2% during midmorning on Tuesday, making them the biggest gainer on the German mid-cap index.
The company, which delivers meal ingredients with recipes to subscribers, has grown rapidly in the US, outperforming rival Blue Apron, which has also reported a sharp increase in demand with the outbreak.
Founded in Berlin in 2011,
HelloFresh is active in 12 markets, including Germany, Britain, Canada and Australia, but it makes more than half of its sales in the US.
HelloFresh said late on Monday it expected quarterly revenue of €685m to €710m, while adjusted earnings before interest, taxation, depreciation and amortisation should come in at €55m to €75m.
Deutsche Bank said that implied revenue growth of up to 69% year on year for the quarter, which it said would be the strongest rise for HelloFresh in more than three years.
HelloFresh said it was managing to ramp up to meet demand, even though CEO Dominik Richter said last week that food supply chains were stretched and it might have to change delivery times depending on the schedules of its partners.
“We are doing everything we can to deliver our boxes on time and so far there have been no major disruptions to our service,” a spokesperson said on Tuesday.
HelloFresh has introduced extra safety measures in its facilities where food boxes are packed, including more frequent hand washing and cleaning, and it has enabled contactless delivery in all its markets.
HelloFresh said uncertainty created by the coronavirus crisis meant it was not amending the guidance it gave earlier in March for 2020 revenue growth of 22%-27% on a constant currency basis and an adjusted margin of 4%-5.5%.