HelloFresh shares at record high on coronavirus sales boost

BERLIN (Reuters) - Shares in meal-kit delivery firm HelloFresh HFGG.DE jumped to a record high on Tuesday after it said it expected strong first-quarter sales and profit due to a surge in demand as coronavirus lockdowns prompt more people to cook at home.

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HelloFresh shares were up 14.2% at 1021 GMT, making them the biggest gainer on the German mid-cap index .MDAX.

The company, which delivers pre-portioned meal ingredients with recipes to subscribers, has grown rapidly in the United States, outperforming rival Blue Apron APRN.N, which has also reported a sharp increase in demand following the coronavirus outbreak.

Founded in Berlin in 2011, HelloFresh is active in 12 markets, including Germany, Britain, Canada and Australia, but it makes more than half of its sales in the United States,

HelloFresh, said late on Monday it expects quarterly revenue of between 685 million and 710 million euros ($755-783 million), while adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) should come in at 55-75 million euros.

Deutsche Bank said that implied revenue growth of up to 69% year-on-year for the quarter, which it said would be the strongest rise for HelloFresh in more than three years.

HelloFresh said it was managing to ramp up to meet demand, even though Chief Executive Dominik Richter said last week that food supply chains are stretched and it might have to change delivery times depending on the schedules of its partners.

“We are doing everything we can to deliver our boxes on time and so far there have been no major disruptions to our service,” a spokeswoman said on Tuesday.

HelloFresh has introduced extra safety measures in its facilities where food boxes are packed, including more frequent hand washing and cleaning, and it has enabled contactless delivery in all its markets.

HelloFresh said uncertainties created by the coronavirus crisis meant it was not amending the guidance it gave earlier in the month for 2020 revenue growth of 22% to 27% on a constant currency basis and an adjusted margin of 4-5.5%.

($1 = 0.9115 euros)

Reporting by Emma Thomasson; editing by Louise Heavens and Barbara Lewis