Beyond Meat “Beyond Burger” patties made with plant-based meat substitutes are up for sale in New York City.
Angela Weiss | AFP | Getty Images
Beyond Meat posted a bigger-than-expected first-quarter loss on Wednesday as the launch of new plant-based jerky weighed heavily on margins.
The company’s shares fell 25% in extended trading, adding to the stock’s losses since the start of the day. Shares of Beyond closed down 13.8% on Wednesday ahead of the company’s earnings report.
Here’s what the company said compared to what Wall Street expected, based on a survey of analysts at Refinitiv:
- Loss per share: $1.58 adjusted vs. $1.01 expected.
- Revenue: $109.5 million vs. $112.3 million expected.
In addition to reporting a first-quarter net loss of $100.5 million, or $1.58 per share, more than a net loss of $27.3 million, or 43 cents per share, a year earlier.
CEO Ethan Brown said in a statement that the company faced a “significant, albeit temporary” decline in gross margins due to support for strategic launches, namely plant-based jerky through a joint venture with PepsiCo. The company’s gross margin was 0.2% of revenue during the quarter, falling sharply from its gross margin of 30.2% a year ago.
“While we’re thrilled with its early sales results and strong customer response, Beyond Meat Jerky’s production, still in its infancy, was a major drag on this quarter’s gross margin,” Beyond Meat Jerky CFO Phil Hardin told analysts. during a conference call.
Hardin said the massive launch of jerky was “unprecedented” for Beyond. The product is available in 56,000 outlets. As a result, according to Hardin, the company’s production was “expensive and inefficient”.
But the company sought to reassure investors. Executives said the first quarter is expected to be the lowest margin point in 2022, with jerky production set to become much more efficient by the second half of this year.
Excluding items, the company lost $1.58 a share, more than the $1.01 a share expected by analysts polled by Refinitiv.
net sales rose 1.2% to $109.5 million, falling short of expectations of $112.3 million.
Total volume, excluding the impact of price or exchange rate fluctuations, increased by 12.4% in the quarter. However, net sales per pound fell by 10%. The company said it had increased discounts for foreign customers and lowered prices in the European Union. Brown also said consumers are shifting from chilled meat substitutes to frozen alternatives.
In the United States, Beyond’s revenue grew 4% thanks to the launch of plant-based jerky at the grocery store. However, U.S. food service revenues, including sales to restaurants and college campuses, fell 7.5% in the quarter. And while its grocery segment reported a 6.9% increase in sales, the company said sales of products other than jerky declined.
Outside of its home market, Beyond’s revenue fell 6.2%, although the company said it sold more pounds of its meat substitutes at both international grocery stores and food service outlets. Beyond also said foreign currency exchange rates hit its international sales.
The company reiterated its full-year revenue guidance of $560 million to $620 million.