((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
(Update of stock movements)
Beyond Meat BYND.O reported a wider-than-expected quarterly loss and an 18% drop in revenue on Wednesday as its higher-priced plant-based meat products impacted sales. volumes.
WHY IT IS IMPORTANT
Demand for Beyond Meat’s products – including hamburger patties, sausages and ground beef – has weakened as their clients such as McDonald’s MCD.N and Yum Brands YUM.N have seen sluggish consumer demand in due to persistent inflation.
CONTEXT
Although Beyond Meat raised prices in the current quarter, the company’s volumes fell 16.1% as consumers limited their spending. Despite the price increases, the company’s margins have been pressured by rising manufacturing costs and material costs. Gross margin increased 4.9% in the quarter, compared to a 6.7% increase last year.
KEY QUOTE
“Consumers are still tightening their belts and are less likely to try new premium food brands,” said Blake Droesch, an analyst at eMarketer.
MARKET REACTION
Shares of the company, which maintained its annual revenue and gross margin guidance, were down about 14%, at $7.04, after market close.
NUMBERS
For the first quarter, the company reported revenue of $75.6 million, compared to analysts’ average estimate of $75.2 million, according to LSEG data. In the U.S. foodservice segment, the company’s revenue fell 16.2% to $12.3 million, compared with a 5.3% decline to $14.7 million il a year ago. On an adjusted basis, Beyond Meat reported a loss of 72 cents per share for the quarter ended March 30, compared to analysts’ estimates of a loss of 67 cents per share.
