(Reuters) -HelloFresh cut its annual core profit outlook and narrowed down its revenue growth guidance after market close on Wednesday, flagging lower than expected sales growth and higher costs for its North American unit in the final quarter.
The German meal-kit maker's shares plunged 10% in the early Frankfurt trade on Thursday following the news.
The North American business was hit by lacklustre customer growth in the key U.S. market, a slower ramp-up of its ready-to-eat production facility in Arizona due to water supply and staff shortages, and longer than expected maintenance works at its Illinois site.
The company said the challenges in both facilities had been largely resolved by now, adding it regarded those effects as temporary and did not expect the impact from them to affect 2024 results.
J.P.Morgan said in a research note that HelloFresh (OTC:HLFFF) attributed the outlook cut mainly to one-off effects during an analyst call following the profit warning.
"However, next to the rather small EBITDA cuts, management is likely to face investor questions on visibility of the business after (old) FY23 guidance was just reiterated with the Q3 results," the brokerage added.
The Berlin-based company had confirmed the annual guidance in October despite lower than expected third-quarter core earnings and a decline in customer numbers.
HelloFresh now expects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of 430-470 million euros ($466-509 million) this year, down from its previous 470-540 million euro range.
It also trimmed the annual constant-currency based revenue growth guidance to 2-5%, down from 2-8% previously.
($1 = 0.9218 euros)