Stay-at-home meal surge puts Marley Spoon on path for profit
Meal kit maker Marley Spoon expects a near doubling of demand in the pandemic to flip its operating earnings from loss to profit.
Marley Spoon says it is benefiting from coronavirus-induced lockdowns, with demand for its delivery meal kits almost doubling globally.
The ASX-listed German company booked 2020 first quarter revenue of €42.8m ($71.4m), a 46 per cent increase on the previous corresponding quarter, with demand starting to surge as COVID-19 restrictions were implemented in March.
Marley Spoon said €22m ($36.6m) of the quarterly revenue had been accrued within a four-week period beginning in the middle of March.
Chief executive Fabian Siegel believes the current conditions are well suited to its at-home cooking subscription service.
“First quarter 2020 saw strong performance for both growth as well as operational efficiency even before the sharp uplift due to the COVID-19 crisis,” Mr Siegel said.
“This new environment is a strong tailwind for our business, and as a result, our path to profitability is being accelerated.”
Marley Spoon’s home delivered do-it-yourself meal kits operate across Europe, Australia and the United States. The company competes directly with popular meal kit provider Hellofresh.
It is expecting the increase in demand will likely see revenue growth exceed its previous guidance of 30 per cent year-on-year. However, it said uncertainty made it impossible to gauge ongoing operating conditions.
The company predicts it will be able to turn operating earnings positive in the second quarter of the calendar year. Marley Spoon posted a first quarter earnings (EBITDA) loss of €6.4m (A$10.6m), a reduction of almost half compared to the 2019 first quarter, which booked a loss of €12.2m (A$20.3m).
A softening of demand has been flagged once COVID-19 restriction ease, but it is still expecting strong momentum in the second quarter while the shutdown continues.
“The future lifting of work and travel restrictions should result in some level of normalisation of customer behaviour with the potential for a softening of currently strong order frequencies, and average order sizes,” it said in a statement to the ASX.
Marley Spoon’s revenue growth in both Australia and the United States grew by 56 per cent, while its European operations increased 11 per cent compared to the previous corresponding period.
Its shares last traded at $1.30 each.
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