Beyond Meat (BYND) Q1 2022 misses earnings estimates

Beyond Meat on Wednesday reported a bigger-than-expected loss for its first quarter as the launch of its new plant-based jerky weighed heavily on margins.

Shares of the company fell as much as 25% in extended trading, extending the stock’s losses from earlier in the day. Beyond shares closed 13.8% lower on Wednesday ahead of the company’s earnings report.

Here’s what the company reported, compared to Wall Street expectations, based on a poll of analysts by Refinitiv:

  • Loss per share: Adjusted $1.58 vs. $1.01 expected
  • Revenue: $109.5 million versus $112.3 million expected

Beyond the reported net loss of $100.5 million, or $1.58 a share, for the first quarter, larger than the net loss of $27.3 million, or 43 cents a share, a year ago.

In a statement, CEO Ethan Brown said the company experienced a “significant, albeit temporary,” decline in its gross margin to support strategic launches, namely that of its plant-based jerky through its joint venture with PepsiCo. The company’s gross margin was 0.2% of sales for the quarter, down sharply from gross margin of 30.2% a year ago.

Beyond Meat Beyond Burger patties, made from plant-based meat substitutes, sit on a store shelf in New York City.

Angela Weiss | AFP | Getty Images

“While we are excited by early sales performance and strong customer response, the infancy manufacturing of Beyond Meat Jerky was a significant headwind to gross profitability this quarter,” Phil Hardin, Beyond CFO, told analysts in the conference call.

Hardin said the large-scale launch of the jerky for Beyond was “unprecedented.” The product is available at 56,000 locations. As a result, according to Hardin, the company’s production was “expensive and inefficient”.

But the company tried to reassure investors. Executives said the first quarter is expected to be the bottom for margins in 2022 and jerky production should be much more efficient by the second half of this year.

Excluding special items, the company lost $1.58 a share, more than the $1.01 a share expected by analysts polled by Refinitiv.

net sales rose 1.2% to $109.5 million, below expectations of $112.3 million.

Total volume, which excludes the impact of price or currency fluctuations, rose 12.4% for the quarter. However, net sales per pound shrank by 10%. The company said it increased discounts for international customers and lowered prices in the European Union. Brown also said consumers are shifting from refrigerated meat substitutes to frozen alternatives.

In the United States, Beyond’s sales grew 4%, helped by the food launch of its plant-based jerky. However, revenue from its U.S. hospitality business, which includes sales to restaurants and college campuses, fell 7.5% in the quarter. And although the food segment posted sales growth of 6.9%, the company said sales of products other than beef jerky shrank.

Outside of its home market, Beyond’s sales shrank 6.2%, although the company said it sold more pounds of its meat substitutes at both international grocery stores and foodservice outlets. Beyond also said that exchange rates hurt international sales.

The company reiterated its full-year revenue guidance of $560 million to $620 million.

Read the full earnings report here. Beyond Meat (BYND) Q1 2022 misses earnings estimates

Gary B. Graves

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