Hellofresh Stock: Shares Plunge on Grim 2025 Outlook

Hellofresh shares tumbled more than 13 percent on Tuesday after the German meal-kit provider shocked investors with a pessimistic forecast for 2025. The company announced an expected currency-adjusted revenue decline of 3 to 8 percent next year, a stark contrast to analysts' previous projections of 2.7 percent growth. The Berlin-based firm attributed this downturn to a strategic shift toward "efficiency and marketing expenditures that prioritize high-quality customers." The North American market, representing approximately two-thirds of total revenue, is anticipated to be particularly affected by this negative trend. Despite posting a modest 0.9 percent revenue increase to roughly €7.66 billion for 2024, Hellofresh is extending its cost-cutting program through 2026 to boost long-term free cash flow growth.

Profitability Targets Rise Despite Revenue Concerns

Countering the gloomy sales outlook, Hellofresh aims to significantly improve profitability metrics in 2025. The company forecasts adjusted EBITDA to reach €450-500 million (up from €399 million in 2024) and plans to grow adjusted EBIT before impairments to €200-250 million (compared to €136 million the previous year)-representing an approximate 65 percent increase. This profitability enhancement will reportedly come through extensive cost reductions, including decreased production capacity, lower personnel expenses, and drastically reduced marketing spending. The fourth quarter of 2024 already showed promising profitability gains, with adjusted EBIT nearly doubling to €95 million and the corresponding margin rising from 2.7 to 5.3 percent, despite falling revenues. Market observers remain divided, with some analysts highlighting the surprisingly positive EBITDA forecast while others question whether profit improvements can be sustained without revenue stabilization.