HelloFresh, Shares Jump after solid Q1 and rising subscriber growth

Shares in the German meal-kit provider HelloFresh surged on Wednesday after a solid first quarter and a continued rise in subscriber growth during the coronavirus pandemic.

HelloFresh said subscriber numbers rose 80% to 4.6 million in the first quarter, with orders rising 114% to 19.3 million.

Revenue rose 118.5% to 1.18 billion euros, and the net loss narrowed to 33.1 million euros compared with a 64.2 million euro loss a year earlier.

The shares were up about 6% to 75.84 euros at 0933 GMT.

To attract new customers, HelloFresh spent a lot on advertising in the first quarter resulting in a 16% increase in marketing costs.

But Chief Executive Dominik Richter said HelloFresh was committed to investing in growth, as it was convinced the momentum would continue as households become more accustomed to ordering their groceries online.

HelloFresh is one of several companies to benefit as consumers switch from traditional grocery shopping to ordering online due to the coronavirus pandemic.

HelloFresh raised its full-year forecast, saying it now expected revenue to rise between 45% and 55% this year. The previous forecast was for growth between 35% and 45%.

The company declined to quantify the impact of the war in Ukraine on its business.

HelloFresh sources some ingredients from Ukraine, but its main growing regions are in the United States and the Netherlands.

“We currently do not see a direct impact on our business, but the situation remains uncertain,” the company said, adding that it may have to pay more for some ingredients.