HelloFresh ETR: HFG reported first-quarter 2026 results showing continued progress in what management described as a “deliberate transformation” focused on improving profitability, customer retention, and product quality, even as that strategy weighs on near-term growth.
Management frames results as part of a longer-term reset
CEO Dominik Richter said the company has “fundamentally overhauled” its customer acquisition approach, marketing spend, and product proposition over the past year. He said HelloFresh has “walked away from unprofitable volume,” tightened marketing ROI thresholds, redirected capital toward product quality, and restructured its fixed cost base.
Richter argued the strategy is showing up in indicators tied to long-term health, including higher order frequency and basket sizes among tenured customers. Group average order value rose by EUR 4.2 in constant currency, while Meal Kits average order value increased 4.5% in constant currency. Richter added that revenue retention and lifetime value metrics for tenured cohorts are “at the best levels ever seen in the business.”
Q1 revenue declined 7.7% in constant currency; adjusted EBITDA impacted by storms
Global CFO Fabien Simon said group net revenue was EUR 1.68 billion in Q1, a 7.7% decline in constant currency, improving from a 9% decline in Q4 2025. Adjusted EBITDA totaled EUR 23.6 million (Richter cited “about EUR 24 million”). Management attributed approximately EUR 25 million of headwinds to severe winter storms in the U.S. and Europe, which disrupted ingredient delivery and last-mile logistics and drove higher wastage, credits, and refunds.
Excluding the weather impact, Richter and Simon said the underlying adjusted EBITDA run rate would have been closer to EUR 49 million. Contribution margin was 25.6%, with management citing strong fulfillment improvements that were offset by front-loaded product investments.
HelloFresh generated EUR 49 million of free cash flow in Q1, its fourth consecutive quarter of positive free cash flow, despite the storm-related impact. Simon said free cash flow was down EUR 18.8 million year-over-year due to lower adjusted EBITDA and higher capital expenditures.
Meal Kits: sequential improvement continues, driven by tenured customers
Meal Kits revenue was close to EUR 1.2 billion, down 8.5% year-over-year in constant currency. Richter said the rate of decline improved for a fifth consecutive quarter, narrowing from roughly 14.5% a year earlier. Simon said Meal Kits order trends are still negative but have also improved sequentially for five straight quarters, with tenured customers ordering more frequently.
However, Simon said reduced marketing over the past 18 months has meant orders from more recent customers remain down and more than offset the strength in tenured cohorts. Meal Kits average order value increased 4.5% in constant currency, which Simon attributed to fewer discounts, marginal price increases, and positive mix. On pricing, Richter said there was no “massive shift in strategy,” but pointed to reduced incentives and pricing actions “mostly in line with the inflation,” sometimes “a little bit over inflation,” alongside increased value to customers.
Ready-to-Eat: losses narrowed sharply as U.S. operations stabilize
Ready-to-Eat revenue was EUR 466 million, down 6.9% in constant currency. Simon said average order value rose 1.4% in constant currency, while orders fell about 8%. He attributed the order decline primarily to the “cumulative impact” of prior operational issues over the preceding nine months, which limited new customer acquisition while the company worked on fixes, plus “some underperformance in conversion” in Q1 as HelloFresh ramped up “quality conversions” and optimized channels and marketing messages.
Richter said the operational setbacks at Factor in the U.S. that affected customer experience and retention are “now fully resolved,” with Net Promoter Score “trending at the highest level since 2023.” He added that Ready-to-Eat tenured active customers grew double digits in Q1 and said Ready-to-Eat adjusted EBITDA losses narrowed by about EUR 80 million in Q1, which he described as a 40% improvement year-over-year.
Simon provided segment profitability details, saying Ready-to-Eat adjusted EBITDA loss improved to EUR 27.6 million from EUR 45.9 million a year earlier, an EUR 18 million improvement, or a 40% reduction. He attributed the improvement to marketing efficiency, operational cost recovery, and resilient economics in the active customer base.
Richter said the remaining challenge is rebuilding the active customer base after nine months of operational issues and a decision not to “invest aggressively” in acquisition while product and supply chain performance were being fixed. He said the company is now restarting acquisitions with “operational confidence and strong ROI discipline.”
Outside the U.S., Richter said Ready-to-Eat in Australia and Canada continues to deliver healthy double-digit growth. He also said a new production facility in Germany has opened and will soon be fully operational, providing capacity to scale Factor in Europe in the second half of the year.
Costs, investment cycle, and 2026 outlook
Simon said contribution margin declined 1.4 percentage points year-over-year to 25.6%, driven by the EUR 25 million storm impact and accelerated product investments, including higher-quality proteins, expanded meal choices, and new ingredients. He said the company expects the 2026 product investment cycle to weigh on gross margin by about 150 basis points, net of price increases.
At the same time, Simon said the efficiency program delivered structural savings, with fulfillment costs improving by 0.8 percentage points as a share of revenue (excluding impairment and share-based compensation). Marketing spend was 21.8% of revenue, down 30 basis points year-over-year, with absolute marketing spend reduced by EUR 62 million. Simon emphasized that tighter ROI thresholds and the elimination of unprofitable channels are now embedded in the operating model, and the company does not expect to revert to prior spending levels—though it also does not expect marketing to fall in 2026 in the same way it did in 2025.
Capital expenditures were EUR 44 million in Q1, up from EUR 34 million a year earlier, primarily due to investment in the Germany facility for Factor Europe. Simon said CapEx should normalize within the company’s full-year guidance as the year progresses.
HelloFresh reaffirmed full-year 2026 guidance for a constant-currency revenue decline of 3% to 6% and adjusted EBITDA of EUR 375 million to EUR 425 million, with delivery expected to be second-half weighted. Simon said Q2 is expected to show a relatively stable rate of revenue decline versus Q1, while the bottom line in Q2 is expected to be EUR 30 million to EUR 40 million below Q2 2025 due to the pull-forward of product investments from H2 2025 into H1 2026.
Richter said investors should see “evidence more clearly for an eventual return to growth in the second half of the year,” while acknowledging uncertainty around macro factors such as inflation and consumer sentiment, particularly in North America. In response to questions, Richter said the company is not seeing a direct impact in current business data but is monitoring “leading indicators from consumer research” and plans to remain disciplined on ROI as it ramps acquisition.
In closing remarks, Richter said the company’s focus remains on improving the experience for tenured customers—reflected in higher ordering and better pricing power—while working to restart the acquisition engine under strict ROI discipline amid macro uncertainty.
About HelloFresh ETR: HFG
HelloFresh SE, together with its subsidiaries, operates as meal kit provider for home industry. The company offers premium meals, protein swaps, double portions, and extra recipes, as well as add-ons, such as soups, snacks, fruit boxes, desserts, ready-to-eat meals, and seasonal boxes. It has operations in the United States, Canada, Australia, Austria, Belgium, Germany, Denmark, France, Luxembourg, the Netherlands, New Zealand, Switzerland, Sweden, Spain, Norway, Italy, and the United Kingdom. The company operates under the HelloFresh brand; and owns the Chefs Plate, Good Chop, The Pets Table, EveryPlate, Factor, Green Chef, and YouFoodz brand names.
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