Key Takeaways
Beyond Meat Inc. projected second-quarter sales that missed analysts’ estimates, sending shares down about 9% as the company battles weak demand for its plant-based meat alternatives.
"This quarter marked a decisive broadening of our Company aperture to include the rapidly growing functional food and beverage category," Beyond Meat President and CEO Ethan Brown said, pointing to a strategic shift amid struggles in the core business.
The company expects revenue of $60 million to $65 million for the current quarter, below the average analyst estimate of $67 million. For the first quarter, revenue fell 15.3% to $58.2 million, though this slightly beat estimates. The adjusted loss was 10 cents per share, narrower than the 77-cent loss a year earlier.
The weak forecast shows the challenge Beyond Meat faces as consumers pull back from higher-priced faux-meat products. The stock, which has fallen over 55% in the past year, dropped to around 94 cents in extended trading.
The sales decline in the first quarter was driven by a 19.5% decrease in the volume of products sold. The U.S. foodservice channel was hit hardest, with revenue plunging 29.7% to $6.6 million. International foodservice revenue also dropped 25.9%, which the company attributed to lower sales to certain quick-service restaurant customers.
A bright spot was the company's international retail business, where revenue grew 8.1% to $13.7 million. Gross margin also showed significant improvement, turning positive to 3.4% from a negative 10.1% in the same period last year, helped by lower costs.
To counter the sluggish demand for its core products, Beyond Meat is expanding into new categories. Earlier this year, it launched "Beyond Immerse," a line of plant-based protein drinks, to attract a wider range of health-conscious consumers.
The disappointing guidance suggests the turnaround remains challenging despite improvements in profitability. Investors will watch for evidence that the company's expansion into new beverage categories can offset the continued weakness in its legacy plant-based meat business during the next earnings report.
This article is for informational purposes only and does not constitute investment advice.
