Packages of Beyond Meat vegetable burger pastries are on display for sale.
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Beyond Meat on Thursday reported a wider loss than expected as higher costs and investments in its business weighed on the margins.
The company also expressed caution for the second half of the year, citing the Covid delta variant.
The company’s shares have fallen more than 4% in extended trading.
Here’s what the company reported compared to what Wall Street was expecting, based on an analyst survey by Refinitiv:
- Loss per share: 31 cents vs. 24 cents provided
- Come back: $ 149.4 million vs. $ 140.8 million expected
In the second fiscal quarter, Beyond said its net loss extended to $ 19.7 million, or 31 cents per share, from a loss of $ 10.2 million, or 16 cents per share, a year before. Analysts interviewed by Refinitiv expected a loss per share of only 24 cents.
The company said losses are accelerating because of the investments it makes to support its expansion efforts, such as adding to its workforce and spending more on marketing, as well as higher transportation costs.
Net sales increased 31.8% to $ 149.4 million, exceeding expectations of $ 140.8 million.
In the United States, which accounts for two-thirds of Beyond’s revenue, demand for groceries has fallen since the company had difficult confrontations a year ago, when consumers were running out of food in front of blocks. Grocery stores still account for about three-quarters of Beyond’s U.S. sales.
Sales of food services in the United States have more than tripled compared to a year ago as customers returned to restaurants. However, the company said it has seen a significant reduction in the number of Dunkin ’locomotives carrying their Al beyond Sausage. CEO Ethan Brown said the company is still engaged with Dunkin ’on new products and the distribution of its sausage alternative to locations in the western United States.
Outside the United States, both food and food service have seen sales more than double. The company has sought to Europe and China as a key part of its plan to become a global supplier of meat alternatives and has invested in expanding production capacities in these regions. Beyond launched its meatless meatballs in Europe for the first time during the quarter.
Looking ahead to the third quarter, Beyond said it expects revenue of $ 120 million to $ 140 million, down from Wall Street estimates of $ 153.3 million. The company said it expects moderate sales of food services as restaurants and cafes stock up on their bare refrigerators and freezers during the second quarter.
Brown told analysts on earnings that some restaurants are more conservative about what they order because of the rise of the delta variant and the lack of willing workers. He also said work problems were delaying at least one of his food service launches, which was postponed to early next year.
The delta variant has become the dominant form of Covid in the United States, leading to a rise in nine cases in recent weeks, particularly in areas with low vaccination rates. While many restaurant companies say so far that they have not seen a material impact on their sales, some localities are beginning to impose restrictions. New York City, for example, will require a vaccination test for some indoor activities, such as eating indoors, that could damage restaurant sales.
“I am optimistic about what lies ahead,” Brown said in a statement. “That said, given the recent uptick in Covid-19 cases, which could disrupt demand patterns, we believe the caution for the year-over-year balance remains broadly appropriate.”