Shares in Beyond Meat fell more than 6 per cent in US after-hours trading on Thursday after results showed the impact of tougher competition and disappointing progress getting its plant-based meat substitute on to restaurant menus.
The company fell more deeply into the red in the first quarter than analysts had been expecting, reporting an adjusted net loss of 42 cents a share that was more than twice the consensus forecast. The figures compared to a net profit 5 cents a share the same time last year.
Revenues were up 11 per cent to $108.2m, but they also missed estimates of $113.7m.
Beyond Meat said it continued to “experience significantly reduced demand in its food service channel” as consumers stayed away from restaurants and restaurant owners streamlined menu offerings or closed or cut operations.
At the start of the pandemic, the company reported a jump in revenues from retail customers who had rushed to stockpile, which helped offset the sharp decline in restaurant sales. However, on Thursday it said the surge in retail demand had “moderated”.
The company’s shares have come under pressure since the start of this month after meat processor Tyson launched its own range of plant-based meat offerings.
Beyond Meat’s rival Impossible Foods has also stepped up a price war, announcing earlier this year its second price cut in less than 12 months as well as discounts for retail customers.
Impossible Foods had increased volume sales and gained market share “largely at the expense of Beyond Meat”, said Alexia Howard, analyst at Bernstein.
Beyond Meat said gross profit for the first quarter was $32.7m, giving a gross margin of 30.2 per cent, compared to $37.7m and a margin of 38.8 per cent the same time last year. It blamed higher transportation and warehousing costs, among other costs, and increased trade discounts and changes in the product sales mix.
It achieved lower net price per pound compared with last year because of increased promotions and a shift towards larger-pack items with lower net price per volume.
Since the start of the pandemic, the company had ceased giving earnings and revenue guidance, but it gave a forecast for second quarter net revenues between $135m to $150m, an increase of 19 to 32 per cent from 2020.