By DEE-ANN DURBIN, AP Business Writer
Plant -based meat company Beyond Meat reported lower -than -expected revenue in the first quarter as it lowered prices and demand from restaurants fell.
The El Segundo, California, company said its revenue rose 1.2% to $ 109.5 million during the January-March period. Wall Street forecasts revenue of $ 112 million, according to analysts surveyed by FactSet.
Beyond Meat’s shares __ are down 60% from the start of this year __ are down 24% in after-hours trading.
Beyond Meat says the total number of products sold in the first quarter increased 12%, but net revenue per pound declined 10%, mostly due to discounts and reduced list prices. .
President and CEO of Beyond Meat Ethan Brown said lowering prices to achieve parity in animal-based meat products remains the company’s long-term goal. But in the first quarter, he said, the company felt pressure to lower prices due to a raft of new competitors, including lower prices on store brands.
“There’s an environment where there’s a lot of unsustainable pricing behavior going on,” Brown said Wednesday in an investor conference call. Brown said Beyond Meat remains the market leader but needs to do a better job of distinguishing its products from competitors.
Beyond Meat says U.S. retail revenue jumped 6.9% in the quarter, but mostly due to the introduction of Beyond Meat Jerky, a meatless jerky developed as part of a snack partnership food at PepsiCo. Beyond Meat said U.S. revenue from its other products, including burgers and sausages, is lower than last year.
U.S. food service sales fell 7.5%, which Brown attributed in part to the omicron variant and restaurant work shortages. Brown said demand for food service began to pick up in March.
Beyond Meat said investments to support new products like jerky have also cut revenue. Jerky is the company’s largest product launch since, with plans to sell in 80,000 locations by the end of May. Its launch is “expensive and inefficient,” said Beyond Meat Chief Financial Officer Phil Hardin, who has batches operating between multiple facilities during production. Those costs should go through the third quarter, when a third party starts making the product, Hardin said.
Beyond Meat reported a net loss of $ 100.5 million for the quarter, up from a loss of $ 27.3 million in the same period last year. The loss, which was $ 1.58 per share, was also higher than the 97 cents loss the analyst had predicted.
Brown insisted that the pain was temporary, and that the company had a lot of potential. McDonald’s expanded testing of its McPlant burger __ developed with Beyond Meat __ during the quarter, for example, and KFC tested a Beyond Meat chicken.
“I don’t think this situation is going on right now,” Brown said. “For those who understand the long -term value we’ve been trying to open, this is the right thing to do.”
Beyond Meat also endorsed a year-round revenue guide. The company expects net revenue to be between $ 560 million and $ 620 million for the year, and an increase of 21% to 33% compared to 2021.
However, the results of Beyond Meat come amid signs of increasing demand for plant-based meat. U.S. sales of meat alternatives were flat in the 52 weeks ended April 30, according to NielsenIQ, a market research firm. In the same period in 2021, they jumped 25%.
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