Hellofresh: cooking box providers on the rise
Profit more than tripled, sales more than doubled: The current figures confirm HelloFresh’s reputation as a beneficiary of the pandemic. CEO Richter is convinced that the cooking box supplier has come to stay.
"During the pandemic, the trend to eat more meals at home intensified," said co-founder and CEO Dominik Richter on the occasion of today’s publication of the quarterly report. Consumers would still rely on online commerce.
"In addition, due to the current situation, they will continue to work a lot from home and accordingly eat more meals within their own four walls." Management assumes that this trend will be sustained in the long term. This is hardly surprising, as the Group’s business model depends on it. Businesses also have to grow in order to survive.
Better to stay in the home
The current corona situation in Germany and Europe is an excellent opportunity for the cooking box provider to win customers who will then stay with HelloFresh. Measured ingredients plus a recipe, which are conveniently delivered to the door in a box, make the time in the home office easier, while restaurants outside are closing and contact with people in the supermarket is perceived as threatening.
In the short term, the trend should actually continue: The fourth quarter is secured because of new lockdown measures in the Covid 19 pandemic, wrote JPMorgan analyst Marcus Diebel. But he remains skeptical about the coming year. It remains to be seen whether the trend will stabilize.
Expansion into other countries?
At least it cannot be ruled out that after months of cooking boxes and a possibly survived pandemic, customers will again enjoy meeting people while shopping. It could become fashionable again to shop at the market to talk to the traders personally about the vegetables and their origins.
The currently breathtaking growth figures are only a snapshot in any case. HelloFresh is unlikely to keep up this pace, even if Richter emphasizes that there is still great potential in the USA and that expansion into other countries is being considered. The group is currently active in 14 countries.
Investors are spoiled
So far, however, things have been going splendidly: In the third quarter, HelloFresh increased sales by a good 120 percent to 970 million euros. Adjusted operating profit jumped from 15 million to almost 115 million euros due to lower marketing expenses.
The bottom line was that the Berlin-based company generated 74.4 million euros in profit between July and the end of September. That was more than three times as much as a year ago. From July to September, five million customers placed nearly 20 million orders. Management confirmed the forecast, which was increased for the third time this year in mid-October.
More course information on HelloFresh
Nevertheless, in a very friendly market environment, the share fell by around three percent and fell to just under 46 euros. HelloFresh recently hit a record high at 56.40 euros. Given the tremendous price gains in recent weeks, investors are likely to take profits off the table.