HelloFresh Q3 core profit tops forecasts as marketing cuts hit orders

HelloFresh reported a stronger-than-expected third-quarter core profit on Thursday, driven by a significant reduction in marketing expenditure, despite a sharp decline in orders. Adjusted EBITDA, the company's core profit measure, was €54.4 million, surpassing the average analyst forecast of €49 million. Adjusted EBITDA in constant currency stood at €50.9 million, representing a 26.3% increase from the previous year's €40.3 million.

The company's marketing spend declined by 24.1% from a year earlier, impacting orders, which fell by 17.9% to 19.6 million. The slowdown in new customer acquisition during the back-to-school period, particularly blamed on reduced marketing efforts, contributed to the decline. However, an increased average order value, up 7.5% at constant currency to €70.5, offset the volume drop. This rise was attributed to selective price increases, more add-on purchases, and a higher share of premium recipes.

Despite the overall decline in revenue to €1.43 billion, which was slightly below the forecasted €1.42 billion, at constant currency it fell to €1.40 billion, down 11.3% from the previous year's €1.58 billion. The contribution margin, excluding share-based pay and impairments, was €331.6 million, slightly below the average forecast of €346.9 million. This was equivalent to 23.3% of revenue, down from 24.5% a year earlier.

Meal kit revenue dropped by 13.1% at constant currency, but its adjusted EBITDA margin improved to 10.7% from 9.4% a year earlier. Ready-to-eat revenue fell by 11.1% at constant currency, with the unit breaching even on adjusted EBITDA, marking a contrast to the €21.6 million loss reported a year ago. The company credited lower marketing costs, efficiency savings, and higher order values for the improved profit.

CEO Dominik Richter outlined the company's priorities for 2026, aiming for a double-digit margin in meal kits and a return to adjusted EBITDA profit for ready-to-eat. While initial metrics and feedback were encouraging, Richter emphasized the need to address temporary operational inefficiencies before reinvesting in growth. The company's free cash outflow narrowed to €5.7 million from €80.7 million a year earlier, reflecting higher adjusted EBITDA, lower lease repayments, and reduced capital expenditure.

For 2026, the company anticipates revenue to decline by 9% to 11% and adjusted EBITDA to range between €350 million and €370 million at constant currency.