HelloFresh added it now planned to achieve break-even during the course of 2019.
Shares in German meal-kit delivery firm HelloFresh slumped on Monday after it said it no longer expected to break even in the fourth quarter of this year as it plans to invest margin profits to support growth.
HelloFresh added it now planned to achieve such break-even on adjusted earnings before interest, taxes, depreciation and amortization (AEBITDA) basis during the course of 2019.
The company’s shares were down 6.6 percent as of 0800 GMT, while the German small-cap index traded 0.8 percent lower.
It follows other companies across the online takeaway and meal-kits sector such as Delivery Hero or Just Eat, who decided to shelve profitability targets this year and spend heavily in order to gain greater market share.
HelloFresh, which competes with struggling U.S. rival Blue Apron, said investments would include such measures as price reductions, increase in meal selections in the U.S. market and scaling up of a new value brand.
The margin on AEBITDA improved by 6.1 percentage points to negative 1.2 percent in the second quarter, the company said.
Excluding the impact from Green Chef, acquired in March, HelloFresh already achieved break-even at the AEBITDA margin on a group level.
At the same time, the company raised its target for 2018 constant-currency revenue growth, excluding Green Chef, to 32 to 37 percent, from previously 30 to 35 percent.
Revenues at constant currencies grew 48 percent in the second quarter to 339.9 million euros ($387.21 million), with 43 percent growth in the United States and 55 percent in the international segment.
Blue Apron said on Aug. 2 its second-quarter revenue fell 25 percent, missing analysts’ estimates, as fewer customers signed up for its service.