Beyond Meat Posts Surprise Loss As Stockpiling Eases, Restaurant Sales Falter
Beyond Meat posted a surprise quarterly loss and lower-than-expected sales, hurt by weaker demand for its plant-based meat at restaurants and retail stores after a surge at the start of the COVID-19 pandemic.
After a nearly 200% rise in retail sales in the last quarter, growth eased to 40.5% in the third quarter, as consumers who had stocked up their freezers with Beyond Meats sausages, burgers and meatballs at the start of the pandemic, slowed purchases.
The company was also hit by a sharp drop in sales at locations such as academic institutions and offices due to the COVID-19 pandemic as well as delays in launches with some of its quick service restaurant partners.
'Unpredictability Of COVID-19'
President and CEO of Beyond Meat, Ethan Brown commented, "Our financial results reflect a quarter where for the first time since the pandemic began, we experienced the full brunt and unpredictability of COVID-19 on our net revenues and accordingly, throughout our P&L.
"Unlike the second quarter where record retail buying and freezer loading by consumers offset the deterioration of our foodservice business as COVID-19 stay-at-home and related measures set in, the long tail of retail stockpiling by consumers, coupled with continued challenges across the majority of our foodservice customers, led to Q3 results that were lower than we expected."
US restaurant sales fell 11.1% in the quarter, while Beyond spent more than expected to deal with the fallout of weak demand from restaurants.
Excluding items, the company posted a loss of 28 cents per share compared with analysts' expectations of a 5 cent profit.
Net sales rose 2.7% to $94.4 million (€79.9 million), but widely missed the $132.81 million (€112.3 million) estimate.
The company decided to keep its outlook suspended, saying it was unable to predict the impact of COVID-19 on its business for the rest of the year.
Brown added, "While we expect the near-term outlook to continue to be shaped by COVID-19, we continue to build the team, assets, market presence, and technology to realise the full potential of Beyond Meat as a significant and lasting global protein company."