Meal-kit delivery specialist HelloFresh said its North American business margins improved in the second quarter, despite a 1.4% dip in revenues.
The Berlin, Germany-based company said the margins contributed by its operations in the U.S. and Canada improved 14.4% in the second quarter to $437.3 million (€399.4 million). North American revenues totaled $1.4 million (€1.26 million).
The margin gains came as customer counts, number of orders, and meals delivered in North America all declined for the second quarter, compared with a year ago. The number of active customers in the U.S. and Canada fell 9.6% from year-ago levels, to 4.12 million. Orders fell 7.6% — to about 17.1 million — and the number of meals delivered fell 6.2%, to 136.6 million.
The company said its overall adjusted EBITDA in the quarter rose sharply, to $210.1 million (€191.9 million), which the company attributed to slight gains in average order rates, an increase in average order value (up 8.4% on a constant currency basis), and disciplined marketing spend, in which some budget has been reallocated to the “seasonally important” autumn period. Operational efficiencies in both procurement and fulfillment also boosted margins, the company said.
Total revenues for the company totaled $2.1 billion (€1.92 billion) in the second quarter. The company said it expects growth to accelerate in the second half of 2023, which will be supported by the production capacity expansion for its ready-to-eat brand Factor and the rollout of several of product enhancements.
“We are excited to de-bottleneck the capacity constraints in our ready-to-eat business, which we believe will drive further significant growth to our business,” said Dominik Richter, CEO and co-founder of HelloFresh.
The results come as longtime rival Blue Apron seeks to revamp its business model. That company recently sold off its meal-kit production to food-prep specialist FreshRealm and trimmed its staff by 20%.
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Monthly meal kit company Hello Fresh saw an overall improvement on its business margins during Q2 (despite a 1.4% dip in revenues.) What are your overall thoughts on these companies? (Blue Apron, Hello Fresh, Sunbasket). Are they rivals? Do they provide inspiration for your own prepared foods / meal kit ideas?
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Let us know in the comments, or email your thoughts to the SN staff at [email protected], and make sure to include your first and last name and job title.
