Amcor stock falls after Raymond James reiterates Market Perform rating
Investing.com -- HelloFresh SE (ETR:HFGG) warned that revenue is expected to decline in fiscal 2025 (FY25) as the company extends its cost-cutting program to improve profitability, sending its shares tumbling more than 11% in European trading Tuesday.
The German meal-kit provider forecast a constant-currency revenue drop of 3% to 8% this year, following a 0.9% increase to around €7.66 billion in 2024. Analysts had projected a 2.7% gain, according to a company-provided poll.
The bearish outlook is driven by the company’s "focus on efficiency and marketing spend that prioritizes high value customers".
The cost-reduction initiative, launched in the second half of last year, will now run through 2026 as HelloFresh (OTC:HLFFF) focuses on long-term free cash flow (FCF) growth.
On a more positive note, HelloFresh aims to boost adjusted earnings before interest and taxes (EBIT) pre-impairment to between €200 million and €250 million in 2025, up from €136 million last year, supported by cost savings and “significant investments into the company’s physical and digital product.”
The company also expects adjusted core profit (AEBITDA) to rise to €450 million to €500 million in 2025, compared to €399 million in 2024.
“HelloFresh’s pre-announced FY25 guidance has disappointed on growth, but positively surprised on AEBITDA,” Jefferies analysts commented.
Separately, analysts at Bernstein revised their estimate for FY24 and FY25 earnings per share (EPS) to account for the new guidance but warned that “confidence in the sustainability of the AEBITDA improvement will be fragile until revenue growth can be stabilised.”
“With that confidence unsupported based on last night’s FY25 outlook, we retain our Market-Perform rating with the next key event being its capital markets day (CMD) on 20 March,” they added.