Shares in HelloFresh plunged 21% after the meal-kit company issued a warning about its adjusted earnings for 2023. The company cited weaker revenue growth in North America and higher costs as the reasons behind the lowered expectations.
Since the beginning of the fourth quarter, HelloFresh has experienced lower-than-anticipated revenue growth and increased costs. The slower ramp-up of its ready-to-eat production capacity impacted customer numbers, revenue, and expenses.
HelloFresh now anticipates adjusted earnings before interest, taxes, depreciation, and amortization for this year to be between 430 million and 470 million euros ($466.4 million-$509.8 million), down from the previously projected range of EUR470 million to EUR540 million. This falls below consensus expectations of EUR495 million.
Moreover, the company has adjusted its forecast for revenue growth in 2023. It now expects growth at a constant currency rate of 2% to 5%, down from the earlier projection of 2% to 8%.
Despite these challenges, HelloFresh does not anticipate a significant impact on its outlook for next year.
While the issues are considered temporary and mostly resolved, analysts from Jefferies believe that this news will still negatively affect HelloFresh shares.