HelloFresh slumps on a second warning in four months
Last November the German meal-kit maker, HelloFresh (HFG), issued a profit warning which sent its shares down 22%.
Today it’s done it again only this time the company has lost almost half its market capitalisation. It said core 2024 earnings would be forecast way below expectations and it also scrapped its mid-term revenue and profit guidance, citing tougher market conditions. The Berlin-based company says 2024 core earnings would be hit by higher marketing expenses and the costs of ramping up in its ready-to-eat business.
(AI Video Summary)
HelloFresh
HelloFresh, a German company that delivers meal kits to people's homes, is currently going through a tough time in the market. They recently announced that their predicted earnings for the next few years are much lower than expected, which has caused their stock prices to plummet. The company blames this on the high costs of marketing and expanding their ready-to-eat business. Unfortunately, this business model is not doing well right now, and as a result, HelloFresh's stock price has dropped by almost 48% in just one day.
To give you a better idea of the situation, let's imagine that HelloFresh is like a restaurant that delivers all the ingredients and recipes to your door, so you can cook a delicious meal at home. They were doing really well before, at their peak, their shares were worth €97 each. But now, they are only worth €5.80. It's like going from dining at a fancy, expensive restaurant to eating at a cheap fast food joint.
HelloFresh's future projections
This sudden drop in value is concerning because it shows that investors are not confident in HelloFresh's future. In fact, there are currently no buyers for the stock, which means that no one wants to invest in the company right now. This is a big change from before when there were plenty of people willing to buy shares of HelloFresh.
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