(Bloomberg) -- HelloFresh SE plunged the most since its 2017 debut after its outlook for the year disappointed and it scrapped 2025 targets. 

Shares in the meal-kit delivery company lost as much as 48% to €6.13 in German trading, the lowest level since January 2019.

HelloFresh expects adjusted earnings before interest, taxes, depreciated and amortization of €350 million ($382 million) to €400 million in 2024, it said in a preliminary earnings statement. That’s less than the level reached in 2023 and well below the average analyst estimate of €545.1 million.

“This is another blow to management credibility and further confirmation of the weak business model,” Bernstein analyst William Woods wrote in a note.

HelloFresh Sinks 42% as Target Pulled in Warning: Street Wrap

The Berlin-based firm, whose shares more than quadrupled during the pandemic as household customers ordered more food online, cited the continued ramp up of its ready-to-eat offering and lower volumes in its meal kits.

What Bloomberg Intelligence Says:

HelloFresh’s high-single-digit sales decline in its core meal-kit business is worse than expected, with the new adjusted Ebitda guidance about 30% below 2024 consensus on an operational deleverage-led drop. Increased marketing, focusing on the high-margin ready-to-eat division (18% of sales), points to challenges reactivating and luring more meal-kit clients. That led management to drop its 2025 Ebitda target of €1 billion, which we had been suggesting was too ambitious.

— Diana Gomes, BI consumer-products analyst

The company said it was “unlikely” to reach its mid-term targets of €10 billion in revenue and €1 billion in adjusted Ebitda by 2025 because of the current “very different operating environment.”

--With assistance from Isolde MacDonogh.

(Adds analysts’ comment in fourth and sixth paragraphs, updates shares)

©2024 Bloomberg L.P.