On Wednesday, Beyond Meat reported losses greater than expected in the first quarter as the launch of its new vegetable cured meat severely hampered profits.
Shares of the company fell 25% in expanded trading, increasing share losses compared to the previous day. Shares of Beyond closed 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 Refinitiv analysts:
- Loss per share: $ 1.58 adjusted against $ 1.01 expected
- Revenue: $ 109.5 million versus the expected $ 112.3 million
Beyond reported a first-quarter net loss of $ 100.5 million, or $ 1.58 per share, exceeding a net loss of $ 27.3 million, or 43 cents per share, a year earlier.
In a statement, CEO Ethan Brown said the company had received a “significant, albeit temporary” blow to its gross margin to support strategic launches, namely its vegetable raw materials through a joint venture with PepsiCo. The company’s gross margin was 0.2% of revenue for the quarter, down sharply from 30.2% a year ago.
Beyond Meat “Beyond Burger” pies, made from plant-based meat substitutes, are on the shelves for sale in New York City.
Angela Weiss | AFP | Getty Images
“While we’re excited about its early sales and strong customer response, Beyond Meat Jerky’s production, which is still in its infancy, has been a significant barrier to gross profitability this quarter,” Beyond CFO Phil Hardin told analysts at the conference.
Hardin said the large-scale launch of the jerk was “unprecedented” for Beyond. The product is available in 56,000 locations. As a result, according to Hardin, the company’s products were “expensive and inefficient.”
But the company sought to reassure investors. Executives said the first quarter is expected to be the lowest level of profitability in 2022, and the production of boiled products should be much more efficient by the second half of this year.
Excluding articles, the company lost $ 1.58 per share, more than analysts polled by Refinitiv expected, $ 1.01 per share.
Net sales rose 1.2% to $ 109.5 million, not meeting expectations of $ 112.3 million.
The total amount that eliminates the impact of pricing or currency fluctuations increased 12.4% in the quarter. However, net income per pound fell by 10%. The company said it had increased discounts for international customers and lowered prices in the European Union. Brown also said consumers are switching from chilled meat substitutes to frozen alternatives.
In the United States, Beyond’s revenue grew by 4%, thanks to the launch of food production of its vegetable cheese. However, U.S. service revenue, which includes sales to restaurants and college campuses, fell 7.5% for the quarter. And although its product segment reported sales growth of 6.9%, the company said products other than dried ones had declined.
Outside the domestic market, Beyond’s profits fell 6.2%, although the company said it was selling more pounds of its meat substitutes in both international grocery stores and catering outlets. He also said that foreign exchange rates have affected its international sales.
The company reiterated its full-year revenue forecast of $ 560 million to $ 620 million.
Read the full earnings report here.