Nov 9 (Reuters) – Beyond Meat (BYND.O) Wednesday saw a bigger-than-expected quarterly loss as rising transportation and raw material costs eat into its margins, and the plant-based meat maker said it expects demand to slow further for its products.
Beyond Meat shares fell 1% in extended trading after the company also missed quarterly revenue estimates.
Consumers, hit by high inflation for decades, have cut spending on discretionary products such as more expensive plant-based meat products and favored pocket animal meat.
“We are testing a price reduction that more quickly reduces the price delta between one of our commodities and its animal protein equivalent,” Chief Executive Ethan Brown said on an earnings call.
In October, Beyond Meat lowered its full-year revenue forecast due to slowing demand, particularly in its chilled sub-segment. The company had also cut an additional 200 jobs to save about $39 million.
“It doesn’t look like revenue is improving anytime soon for Beyond,” said CFRA Research analyst Arun Sundaram.
The company’s margins were hit due to ongoing industry-wide supply chain challenges, the Russian-Ukrainian war and rising inflation.
Beyond Meat, which faces growing competition from companies such as Tyson Foods (TSN.N) and the private company Impossible Food Inc, also cut prices sharply, which further weighed on its margins.
CEO Brown said the sheer volume of competition in the plant-based meat category has eroded some of Beyond Meat’s market share.
The company’s net loss widened to $101.7 million, or $1.60 per share, in the third quarter. Analysts on average had expected a loss of $1.14 per share, according to IBES data from Refinitiv.
Net revenue fell 22.5% to $82.5 million, missing analysts’ estimates of $98.1 million.
Reporting by Granth Vanaik and Ananya Mariam Rajesh in Bengaluru; Editing by Maju Samuel
Our standards: The Thomson Reuters Trust Principles.