Beyond Meat trims upper end of annual revenue forecast on weak faux meat demand
7:15 pm Wednesday, November 06th, 2024
By Anuja Bharat Mistry
(Reuters) -Beyond Meat cut the top end of its annual revenue forecast on Wednesday, as cost-conscious consumers reined in spending on its expensive faux meat products and switched to cheaper alternatives.
Shares of the company were down about 5% in extended trading.
Beyond Meat’s aggressive prices increases over the past few quarters to counter higher ingredient costs, which have now eased from their peaks, have hurt demand for its plant-based meatballs and steak.
Quarterly sales volumes took a hit with the company reporting a 7.1% fall, compared with a 3.5% rise a year ago.
Beyond Meat’s customers in restaurant and fast-food industries such as McDonald’s are also grappling with weaker demand, further denting the vegan burger meat producer’s performance over the last two years.
“It will be very difficult for these (plant-based meat makers) companies to win a second chance from consumers who already tried these products and did not have a good experience,” said Blake Droesch, analyst with eMarketer.
Beyond Meat expects annual revenue to be between $320 million and $330 million, compared with its prior forecast of $320 million to $340 million.
Easing materials and logistics costs as well as increased net revenue per pound helped in expanding its quarterly margins to 17.7% compared to a 9.6% drop a year ago.
But the company said it was also further restructuring its balance sheet in 2025 and looks to increase cash reserves by year-end.
It’s quarterly revenue rose 7.6% to $81 million beating estimates of a 7.2% rise to $80.7 million, according to data compiled by LSEG.
Excluding items, it reported a loss of 41 cents per share for the quarter ended Sept. 28, compared with estimates of a loss of 44 cents.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Anil D’Silva and Maju Samuel)
