Beyond Meat says delta fears, work troubles induce fewer restaurant orders

Ethan Brown, founder, president and CEO of Beyond Meat

Adam Jeffery | CNBC

The Covid delta variant and work challenges result in fewer orders of Beyond Meat products from restaurants.

CEO Ethan Brown told analysts Thursday that independent restaurant operators were testing Beyond’s meat alternatives in the fourth quarter on July 3, helping U.S. food service revenues grow 269% from a year ago. However, the emergence of the delta variant as the dominant form of Covid in the United States has led some of them to lose their trust, resulting in more conservative orders.

Brown also said the lack of willing workers has led to at least one launch of the food service to be delayed until early next year.

“So these two effects, the impact of the work and then the continuous bit of cloudiness on the Delta variant, I think, creates a bit of a drag on the food service at the moment,” Brown said. “And so for us, I think the main feature of the third quarter, and our guidance is, is just lack of visibility.”

For the third quarter, Beyond forecasts revenue of $ 120 million to $ 140 million, falling less than Wall Street’s estimates of $ 153.3 million.

While many restaurant companies say so far that they have not seen a material impact on their sales arising from the delta variant, some localities are beginning to impose restrictions. New York City, for example, will need a vaccination test for some indoor activities, such as eating indoors, that could damage restaurant sales.

The disappointing outlook, combined with a larger loss than expected during the second quarter, sent Beyond shares up more than 5% in extended trading.

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