Beyond Meat on Wednesday reported a wider-than-expected loss for its first quarter because the launch of its latest plant-based jerky weighed heavily on margins.
Shares of the corporate fell as much as 25% in prolonged trading, extending the stock’s losses from earlier within the day. Beyond’s stock closed Wednesday down 13.8% ahead of the corporate’s earnings report.
Here’s what the corporate reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Loss per share: $1.58 adjusted vs. $1.01 expected
- Revenue: $109.5 million vs. $112.3 million expected
Beyond reported first-quarter net lack of $100.5 million, or $1.58 per share, wider than its net lack of $27.3 million, or 43 cents per share, a 12 months earlier.
In a press release, CEO Ethan Brown said that the corporate saw a “sizable though temporary” hit to its gross margin to support strategic launches, namely that of its plant-based jerky through its three way partnership with PepsiCo. The corporate’s gross margin was 0.2% of revenue in the course of the quarter, tumbling sharply from its gross margin of 30.2% a 12 months ago.
Beyond Meat “Beyond Burger” patties constituted of plant-based substitutes for meat products sit on a shelf on the market in Latest York City.
Angela Weiss | AFP | Getty Images
“While we’re thrilled with its early sales performance and powerful customer response, Beyond Meat Jerky manufacturing, still in its infancy, was a major headwind on gross profitability this quarter,” Beyond CFO Phil Hardin told analysts on the conference call.
Hardin said that the large-scale launch of the jerky was “unprecedented” for Beyond. The product is obtainable in 56,000 locations. Because of this, the corporate’s production was “expensive and inefficient,” in keeping with Hardin.
But the corporate sought to appease investors. Executives said that the primary quarter is anticipated to be the low point for its margins in 2022, and jerky production must be far more efficient by the second half of this 12 months.
Excluding items, the corporate lost $1.58 per share, wider than the $1.01 per share expected by analysts surveyed by Refinitiv.
Net sales rose 1.2% to $109.5 million, falling wanting expectations of $112.3 million.
Total volume, which strips out the impact of pricing or currency fluctuations, increased 12.4% within the quarter. Nonetheless, net revenue per pound shrank by 10%. The corporate said it increased discounts for international customers and reduced prices within the European Union. Brown also said that customers are shifting from refrigerated meat substitutes to frozen alternatives.
In the US, Beyond’s revenue rose 4%, helped by the grocery launch of its plant-based jerky. Nonetheless, U.S. food service revenue, which incorporates sales to restaurants and college campuses, fell 7.5% in the course of the quarter. And although its grocery segment reported sales growth of 6.9%, the corporate said products besides the jerky saw their sales shrink.
Outside of its home market, Beyond’s revenue shrank 6.2%, although the corporate said it sold more kilos of its meat substitutes in each international grocery stores and food service outlets. Beyond also said foreign exchange rates hit its international sales.
The corporate reiterated its full-year revenue forecast of $560 million to $620 million.