HelloFresh Q2 Earnings Call Highlights

Revenue declined 7.8% year over year to EUR 1.5 billion in constant currency, as Meal Kit and Ready-to-Eat sales fell amid reduced marketing spending and cautious customer acquisition. The company said growth is trending toward the bottom end of its full-year range. HelloFresh is prioritizing product improvements and customer retention, including broader menus, personalization and new recipe options. These investments have lifted average order value and order rates, but fewer new customer conversions are limiting overall growth. The company reaffirmed its full-year adjusted EBITDA outlook and expects positive full-year free cash flow. Ready-to-Eat profitability improved, with management targeting a positive segment margin in the second half, while HelloFresh also issued a EUR 350 million bond to refinance debt and extend maturities. HelloFresh said its second-quarter revenue declined as the company maintained strict marketing-return thresholds and continued investing in product improvements, while reaffirming its full-year adjusted EBITDA outlook. The company reported second-quarter revenue of EUR 1.5 billion, down 7.8% in constant currency from a year earlier. Meal Kit revenue fell 8.9% in constant currency and Ready-to-Eat revenue declined 8.4%, while the Other segment, which includes specialty meat and pet-food ventures, grew 36.1%. Management characterized the period as the second stage of a multiyear rebuild: following an effort to lower its structural cost base, HelloFresh is directing savings toward product upgrades before pursuing growth more aggressively. The company said it had implemented roughly 85% of its initially announced EUR 300 million efficiency program by the end of the first half, with the remaining measures planned for the second half. HelloFresh said it is expanding menu choice and personalization through what it calls “the refresh,” a stage-gated product-investment program that tests initiatives in selected markets before broader rollout. The company cited additions including GLP-1-friendly Factor recipes, lower-preparation meal-kit options, new protein selections and expanded ingredient-swapping capabilities. It also highlighted its HelloFresh Unboxed tool, which enables users to save recipes seen online into a HelloFresh-style recipe card without requiring a subscription. Customers have saved more than 3 million recipes since the feature launched, management said. The company said the investment has increased costs initially but is intended to improve retention and expand its addressable market. In Meal Kits, constant-currency average order value rose 5.7% in the first half and order rate increased 4.1%. In the second quarter, group average order value increased 6.5% in constant currency to EUR 71, driven by add-ons, premium recipes and some pricing increases. Revenue from Meal Kit customers who have been with the company for more than four years accounted for 34% of first-half net revenue, compared with 7% in the first half of 2023, according to management. In Ready-to-Eat, revenue from customers with more than two years of tenure represented 20% of revenue. However, HelloFresh said lower customer acquisition in prior periods has reduced the number of newer customers progressing into long-tenured cohorts. CFO Fabien Simon said stable revenue from established customers reflects higher order rates and lower churn in markets where product investments are more advanced, but fewer new conversions have constrained overall growth.