HelloFresh second quarter earnings surge as lockdown effects persist

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(Reuters) - German meal-kit delivery firm HelloFresh (DE:HFGG) reported a surge in second-quarter sales and core profit on Tuesday, confirming its July estimates, as extended coronavirus lockdowns kept on driving demand for food deliveries in the United States and other markets.

The Berlin-based company, which lets customers choose among its online recipes and have the pre-portioned ingredients delivered at their doorstep, has also raised its full-year guidance on Monday, citing increased demand amid a resurgence the virus in some of its markets and higher retention of its customers.

It now expects 2020 revenue growth on a constant currency basis of between 75% and 95%, up from an earlier range of 55%-70% and adjusted earnings before interest tax, depreciation and amortization margin between 9% and 11% from previously forecasted 8%-10%.

HelloFresh, which saw a steady increase in orders in recent months due to more people relying on food deliveries and cooking at home during the pandemic, is benefiting from social distancing rules and renewed risks of second-waves, which keep customers away from brick-and-mortar stores and restaurants.

The company's second-quarter revenue more than doubled year-on-year to 972.1 million euros ($1.14 billion)from 436.7 million euros in the second-quarter of 2019, in-line with its own forecasts of around 965-975 million euros.

Adjusted EBITDA came in at 153.6 million euros against the company's July estimate of around 145-155 million euros.

"The growth we've been seeing in the last months has been exceptional, as both new and existing customers have made HelloFresh their go-to choice for cooking at home," Chief Executive Dominik Richter said in a statement, adding there were clear indicators that customers have started to form new habits and expanded their share of weekly meals.