Shares in Nasdaq-listed Beyond Meat (BYND) slumped in after-hours trading on Monday as the plant-based burger maker swung to a third quarter loss, with sales missing analyst estimates by miles.
Net sales for the third quarter ended 26 September fattened up just 2.7% year-on-year to $94.4 million, falling massively short of the 48% growth called for by consensus. Beyond Meat reported a net loss of $19.3 million.
COMPANY BLAMES STOCKPILING
Famed for its ‘Beyond Burger’ that mimics the traditional ground beef burger, the California-based meat substitute company attributed the disappointing performance to declines in restaurant sales and a slowdown in retail purchases as consumers worked through the stockpiles built at the beginning of the coronavirus pandemic.
‘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 profit and loss statement,’ explained chief executive Ethan Brown.
‘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.’
Beyond Meat’s shares plunged by more than 22% in trading after the market closed, having chalked up a 4% decline during Monday's session. It leaves the stock at an implied $116.73, having closed on Friday at $156.86.
DEAL WITH MACCYDS
The poor results overshadowed confirmation that the company is working with fast-food giant McDonald’s to develop a burger as part of its ‘McPlant’ range, expected to launch next year.
McDonald’s earlier announcement of its plant-based McPlant line created confusion as to whether Beyond Meat would be a supplier for America’s biggest restaurant chain by revenue, but Beyond Meat later clarified that the two companies have ‘co-created a plant-based patty which will be available as part of their McPlant platform’.
Beyond Meat’s list of fast-food chain partnerships already includes Dunkin’, Del Taco and Denny’s in the US, while in China, where Beyond Meat is looking to build a larger presence, Starbucks is among the companies currently selling its products.
‘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,’ insisted Brown.
