While its customer base shrank in the first quarter, strong revenues and a better outlook for the rest of 2023 has the CEO optimistic.
HelloFresh is out with its latest financial report, which showed that the company posted record quarterly revenue of more than $2.2 billion (€2.02 billion in euros) during the opening months of its fiscal year. The German meal kit company also shared that it expects to stay on track with its 12-month performance.
In March, HelloFresh cautioned that it expected ongoing inflation, consumer spending adjustments and an overall more challenging economic environment to tamp down growth in the first part of the year but anticipated a return to growth during the back of 2023. The Q1 report reconfirmed that outlook, projecting revenue growth on a constant currency basis of 2% to 10% with an adjusted EBITDA between $506 million and $594 million.
[Read more: "HelloFresh Introduces ‘Guardians’ Snack Kit, Recipe Series"]
As for the recently-concluded first quarter, revenue rose 3.3% on a constant currency basis. Although dollar sales were fueled in part by global pricing dynamics, another indicator of HelloFresh’s Q1 performance is the order rate, which stayed consistently stable. Order value rose 8.9% on a year-over-year (YoY) basis during the first quarter.
The effects of high prices, overall economic wariness and a change in pandemic-era eating and cooking habits were felt during quarter, as the number of active customers declined compared to the first quarter of 2022. That said, the company’s active customer base was up over the last quarter of 2022. According to HelloFresh, the average quarterly order rate per customer came in at 4.0 for the recent financial period.
HelloFresh is striving to maintain or buoy orders by offering a larger assortment and order flexibility, such as more options to switch individual ingredients and to choose delivery slots and cut-off times. The company has also expanded the types of meals offered in its portfolio.
CEO Dominik Richter said that these and other efforts are helping HelloFresh maintain its outlook. "Our strong diversification across geographies, brands and business models has allowed us to navigate a volatile macroeconomic environment and continue our strong and profitable growth path into 2023,” he remarked.
Looking ahead, he continued, “Our main focus is now to further expand our customer proposition and provide our customers with an even better experience and even more meal solutions to choose from. I am confident that this will further drive the profitability of our meal kit business. At the same time we remain very excited about the growth prospects of our ready-to-eat business.”
Berlin-based HelloFresh operates in 18 international markets and is No. 50 on The PG 100, Progressive Grocer’s 2022 list of the top retailers of food and consumables in North America.