Stocks in free fall
Sheer panic among Hellofresh investors – 850 million destroyed
March 8, 2024, 11:25 a.m
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The boom of the Corona years is over. Hellofresh is particularly struggling with ready meals. Now the group is cashing in on its targets and is expecting another decline in earnings for the current year.
Investors in the meal kit retailer Hellofresh are throwing their papers onto the market in droves. The company had declared the evening before that it would probably not achieve its medium-term goals due to sluggish business. This had a massive impact on shareholders. The securities crashed and lost almost half of their value. At 6.46 euros, they were cheaper than they had been in five years. The stocks listed in the MDax were heading for the highest price fall in their company history. The company lost around 850 million euros in market capitalization. During the corona pandemic, the paper cost more than 90 euros.
In the current financial year, the operating result (Ebitda) is likely to fall below the 2023 level. Last year it had already fallen from 477 million to 448 million euros. The Berlin-based company thus met the lower range of its lowered forecast in November. The outlook for 2024 is disastrous and is the second moment of shock for investors after the profit forecast was cut in November last year, a trader said. Another said that abandoning the 2025 medium-term goals was overdue. The fact that Hellofresh was apparently not prepared to issue new targets was a negative surprise.
Hellofresh had to struggle with problems in its ready meals business last year, and the reduced profit forecast caused the company to experience the biggest share price fall in its history. The weak US ready meals division in particular was causing problems for the group. The ready meals sector, on which Hellofresh has great hopes, is currently showing growth of around 50 percent compared to the previous year and is likely to continue to benefit from strong demand.
The dry spell in the classic meal kit business continues. The business is currently experiencing a decline in sales in the high single-digit percentage range. Hellofresh plans to publish the full annual report on March 15th.