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Shares in the food delivery company HelloFresh have plunged by more than 40% after it warned its earnings would fall below expectations.

The German meal-kit maker said it expected earnings of between €350m (£298m) and €400m (£341m) this year, down from the €568m (£484m) analysts had previously estimated.

The company also scrapped its revenue and profit targets for next year, pointing to higher costs in the development of its "ready-to-eat" business.

The warning over its revenues comes after the company was fined for sending millions of spam emails and texts to customers.

In January, the recipe box firm, founded in 2011, was told to pay £140,000 following a 2022 investigation by the UK's Information Commissioner's Office (ICO).

HelloFresh, along with its competitors including Gousto and the Mindful Chef, saw business boom during the height of the coronavirus pandemic, when people were told to stay at home.

Customers choose meals from a changing online menu and receive recipe cards and fresh ingredients in a box once a week ready for cooking. Subscribers are often attracted by deals with large discounts off their first box.

But customer numbers have dropped after restrictions eased and with the cost of living rising in recent years. Some 7.1 million people worldwide subscribe, according to the company's latest figures, down from more than 8.5 million in 2022.

During the height of the pandemic, shares traded close to €100 each, but on Friday they were selling for less than €7.

HelloFresh said it had re-evaluated its business plan and it was now unlikely to reach its previously announced mid-term revenue target of €10bn by 2025 due to the "very different operating environment".

In November, the company cut its profit estimate for 2023, flagging lower-than-expected sales growth and higher costs for its North American unit.

Investment bank JP Morgan said in a note that a recent poor track record in providing reliable guidance by HelloFresh management meant investors were likely to shun the stock until results improve.

HelloFresh's struggles follow rival Gousto slashing its valuation in February last year when it raised around £50m by offering discounted shares to investors.