Hellofresh Stock: Shares Plunge on Grim Forecast

Hellofresh investors faced a significant setback Tuesday as shares plummeted 9.7% to €9.08 in pre-market trading on Tradegate, reaching their lowest level since October last year. The meal-kit provider shocked markets with a disappointing outlook for 2025, projecting a currency-adjusted revenue decline of 3-8% against analyst expectations of nearly 3% growth. This dramatic forecast reversal primarily stems from weakening demand, particularly in North America, which represents approximately two-thirds of the company's total revenue. Despite these challenges, Hellofresh aims to boost its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to €450-500 million, up from €399 million the previous year. The fourth quarter showed promising profitability developments amid declining sales, with adjusted EBIT nearly doubling to €95 million from €50 million year-over-year, improving margins to 5.3% from 2.7%.

Comprehensive Efficiency Program Targets Profit Growth

To counter revenue challenges, Hellofresh is significantly expanding its efficiency program through 2026. The comprehensive cost-cutting initiative includes reducing meal kit production capacity, trimming personnel expenses, and implementing stricter marketing expenditure controls. Moving away from previous discount-heavy customer acquisition strategies, the company now plans to focus on attracting "high-quality" customers who order without requiring promotional vouchers. Through these measures, management expects to increase adjusted operating profit (EBIT) substantially from €136 million to €200-250 million, despite the projected sales decline. The stock currently displays concerning technical indicators, including the formation of a double top pattern, as investors closely monitor its performance relative to the critical 200-day moving average.