Beyond Meat missed market expectations for quarterly revenue and posted a wider-than-expected loss on Wednesday, hurt by relentless weakness in demand for plant-based meat in the United States.
The company has been offering steeper discounts, as consumer sentiment about plant-based meat and its health benefits took a beating.
In a post-earnings call, Beyond Meat executives said the percentage of people in the United States who believe plant-based meats are healthy is likely to have dropped further this year, after falling 38 percent in 2022 from 50 percent in 2020, as per data from trade association Food Marketing Institute.
Net revenue for the third quarter fell 8.7 percent to $75.3 million, missing analysts’ average estimate of $85.4 million, as per LSEG data.
Still, easing input costs, including that of manufacturing, materials and logistics, helped the company post a year-on-year improvement in gross margins.
The company’s shares, which have fallen almost 45 percent so far this year, fell marginally in extended trade.
“We are disappointed by our overall results as we continue to experience worsening sector-specific and broader consumer headwinds,” said Beyond Meat’s CEO Ethan Brown.
Momentum in international retail and foodservice net revenues continued, while retail volume in the United States was bogged down by soft demand and higher discounts, falling 18.8 percent in the reported quarter.
“Consumers in the U.S. haven’t fully warmed up to plant-based protein alternatives like Beyond Meat ... because the products ... don’t live up to shoppers’ standards for taste and flavor,” said Rachel Wolff, senior analyst at Insider Intelligence.
Earlier this month, Beyond Meat trimmed its annual revenue forecast, and announced fresh job cuts as part of a cost-reduction plan.
For the period ended Sept. 30, Beyond Meat posted a loss of $1.09 per share, compared with market expectations of a loss of 89 cents per share.
