Meal-kit delivery company My Food Bag (MFB) expects to report lower full year earnings, due to the lingering effects of the Omicron outbreak and rising inflation.
Deliveries for the four months ended July were down 3.8 percent on a year ago. Photo: Facebook / My Food Bag
In a trading update, the company said it had a slower than expected start to the current financial year, with deliveries for the four months ended July down 3.8 percent on a year ago.
Active customers had increased by more than 1 percent and revenue had also risen by 2.5 percent but MFB's underlying profit had fallen by about 8.5 percent.
The company said that the Omicron variant had impacted its suppliers in the final quarter of FY22, as they had difficulties accessing staff and dealing with the flow-on problems of incomplete and late deliveries.
"My Food Bag responded to these challenges at the time by further simplifying its product offering and reducing marketing activity, which had the effect of a slower start to FY23."
Trading had also been affected by the inflationary pressures on households, it said.
"This has resulted in a relatively stronger Bargain Box performance within our portfolio of brands and an overall pattern of customers trading down to smaller bags."
However, the shift towards cheaper and smaller bags had resulted in a less favourable profit mix, the company said.
"As a consequence of the lower earnings performance to date and anticipated impact from ongoing economic headwinds, full year earnings for the current year are expected to be below FY22."
MFB said it had responded to rising inflation and severe weather events with price increases and ingredient substitution where possible.
The company said it planned to lift its financial performance by introducing new products and encouraging customers to order more frequently through its new loyalty programme.