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Beyond Meat Stock Tumbles Over Less-Than-Expected Q4 Outlook

Beyond Meat Stock News

By Quantale. IO- Real Time Stock Market MonitoringPublished 2 years ago 3 min read
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Beyond Meat Stock Tumbles Over Less-Than-Expected Q4 Outlook

Earlier in the pre-market trading hours on Thursday, shares of Beyond Meat

Beyond Meat, Inc. $BYND: $83.82(-1.56%) sank more than 25%, registering a low of $75.1. The freefall in the stock came at a time when the company announced a loss in the third quarter that was more than double what analysts expected as the demand for its meat substitute in the domestic market contracted. Also, the faux meat maker company sees dwindling sales ahead, raising red flags over the sustenance of the business.

The company reported a loss per share of 87 cents, whereas analysts surveyed by Refinitiv anticipated it to come at 39 cents per share. The Net revenues for the reporting quarter stood at $106.4 million, an increase of 12.7% year-over-year. Despite registering an increased YOY, the company failed to meet Wall Street expectations of $109.2 million.

The revenue in the domestic market fell 13.9% compared with a year ago, mostly due to weaker grocery demand. Sales of the company’s plant-based meat faced some jolts as fast-food chains during the reporting period were in the grip of Delta COVID-19 variant and restaurants were trimming hours and reducing menus to cope up with a labour shortage. However, net revenue in international markets saw a rise of 142.5% compared to the year-ago period. Expansion of overall distribution accelerated orders and, to a lesser extent, new product introductions attributed to such an increase.

Beyond Meat President and CEO Ethan Brown in a statement said, “Our third-quarter results reflect variability as we saw a decline from record net revenues just a quarter ago. Despite current disruptions, we remain focused on rapidly advancing key building blocks of long-term growth. Whether scaling products and infrastructure for our strategic quick-serve restaurant partners, bringing new products to retail markets, or investing in innovation, commercialization, and production capabilities here in the U.S., EU, and China, we believe we are steadily executing against our vision of being tomorrow’s global protein company.”

Loss from operations in the third quarter stood at $54.0 million compared to $18.5 million in the year-ago period. The increase in loss from operations was primarily due to “growth in overall headcount levels mainly to support the Company’s operations, innovation and marketing capabilities, increased investments in marketing activities, higher professional services fees related to recently established consulting agreements, higher restructuring expenses primarily reflecting increased legal costs, increased production trial activities, and higher outbound freight costs included in the Company’s selling expenses,” the company said.

Adjusted EBITDA marked a loss of $36.8 million, or -34.5% of net revenues, while in the year-ago period, it was $4.3 million, or -4.5% of net revenues.

Amidst these negatives, the company’s fourth-quarter forecast also looks dim. Beyond Meat is expecting net sales to come in between $85 million to $110 million versus Wall Street expectation of $131.6 million during the quarter.

At least seven brokerages downgraded the stock, with several analysts believing Beyond Meat to continue facing a slowdown. "Sesn Stock News"

“With the increased competition over the past two years, we’re seeing, as expected, some impact on our market share,” CEO Ethan Brown said on an earnings call.

He also mentioned that customers seemed least inclined to try out newer products during the pandemic.

New York-headquartered Jefferies called it “the quarter that likely broke the camel’s back.”

“Given the drop in revenues in Q3, a still-pressured Q4, revenue growth uncertainty in the near-term and into 2022 increases,” Jefferies analyst Rob Dickerson said.

Bernstein analyst Alexia Howard downgraded the stock, telling investors to refrain from buying the dip, reported CNBC.

“We view the results as further evidence that Beyond’s business is reaching market saturation faster than expected and that the company has deeper problems that won’t be easy to fix,” Credit Suisse analyst Robert Moskow wrote in a note.

“We are not yet sure who is right – Beyond Meat or Maple Leaf Foods – but when we hear commentary like this, it’s hard to be completely confident about the future of the category,” Goldman wrote.

The warnings from the analyst possibly impacted the ‘Beyond Meat stock, as around noon, the stock had fallen more than13%, trading at $81.44.

On Wednesday, the shares of the faux meat maker stock closed at $94.48, down $3.51apiece from its previous day’s close of $ 97.99. The social engagement for the stock amongst the users of Twitter and Reddit rose more than 900% combined with an increase of roughly 95% in the trading volume.

Today the stock opened at $80.90, down $13.58 from the last day’s close.

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