Beyond Meat “Beyond Burger” cakes made from plant-based substitutes for meat products are on a shelf for sale in New York City.
Angela Weiss | AFP | Getty pictures
Beyond Meat reported an increasing loss in the third quarter on Wednesday as US demand for meat substitutes shrank and higher costs eroded profits.
The company also disappointed investors with the outlook for the fourth quarter, indicating that sales are not expected to pick up immediately. The shares in the company fell 1[ads1]8% in expanded trading.
Here is what the company reported compared to what Wall Street expected, based on a survey among analysts from Refinitiv:
- Loss per share: 87 cents against the expected 39 cents
- Revenue: $ 106.4 million against an expected $ 109.2 million
Beyond reported a net loss of $ 54.8 million in the third quarter, or 87 cents per share, greater than a net loss of $ 19.3 million, or 31 cents per share, a year earlier. Analysts surveyed by Refinitiv expected a loss of 39 cents per share.
The company said it was facing higher transport and inventory costs and increased inventory depreciation, which hurt profits.
Net sales rose 12.7% to $ 106.4 million, missing expectations of $ 109.2 million. The company reported strong growth outside the US, with international grocery and restaurant divisions each seeing sales more than doubling during the quarter.
However, US revenues fell 13.9% compared to a year ago, mainly due to weaker grocery demand. The company said that softer demand and operational challenges, such as severe weather, hurt domestic sales. New products, such as the meat-free chicken, slightly compensated for the decline.
In October, the company warned investors that it would report weaker sales than previously forecast, citing a wide range of factors, including the delta variant and distribution problems.
And the company’s forecast does not indicate a sunny fourth quarter. Beyond predicts net sales of $ 85 million to $ 110 million for these three months. Wall Street expected revenue of $ 131.6 million during the quarter.
Beyond said it expects some of the operational challenges from the third quarter will also drag down the results for the fourth quarter. It also cited restaurants’ work challenges and hesitant ordering behavior due to uncertainty surrounding the pandemic as other factors built into the outlook. The company noted that the period contains 5 fewer shipping days than the year before.
“Despite short-term market and operating conditions, we remain committed to our long-term strategy,” CEO Ethan Brown said in a statement.