Beyond Meat, a company that sells plant-based meat alternatives, has missed earnings expectations in its third-quarter results, citing coronavirus “unpredictability”.
The Los Angeles-based firm reported net revenue of $94.4m, up 2.7% year on year but significantly down on the $132.8m forecasted by analysts.
In the quarter ended 26 September, Beyond Meat notched up net losses of $19.3m, or $0.31 per common share. Analysts had predicted losses per share of $0.05.
The company’s share price tanked by as much as 28% following its disappointing Q3 results, published Monday. However, its shares recovered slightly after the company confirmed a partnership with McDonald’s to launch the ‘McPlant’ burger in 2021.
Beyond Meat CEO Ethan Brown said its Q3 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”.
He added that retailers and consumers had stocked up on products in Q2, resulting in a drag down effect on Q3 sales volume.
Sales in its US foodservice segment fell 11% in the quarter as the pandemic reduced footfall in restaurants.
The company also spent $1.8m on coronavirus-related expenses. When these additional costs are factored in, Beyond Meat lost $0.28 per share in Q3.
A beyond awful Q3?
While Brown attributed the sub-par quarter to the pandemic, competition from rivals such as Impossible Foods is likely to have also dented Beyond Meat’s revenues as more players enter a market predicted to be worth $140bn by 2029.
This is supported by the $132m of inventory sat in the company’s warehouse, a 62% year-on-year rise that could suggest it is struggling to find demand for its range of plant-based products.
Beyond Meat’s poor Q3 results have not deterred the company from investing in staff and production facilities located in Europe and China, as well as pursuing an acquisition of a new production plant in Pennsylvania.
“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 realize the full potential of Beyond Meat as a significant and lasting global protein company,” said Brown.